Heidelberger Druckmaschinen Aktie

Welcome to the conference call regarding the publication of the first quarter of full year 2026-2027. The conference call is being recorded. [Operator Instructions] Let me now turn the floor over to your host, Jurgen Otto.

Yes. Good morning, ladies and gentlemen, and welcome to Heidelberger conference call on the publication of the figures for Q1 206-2027. We're delighted to welcome our investors and analysts. Besides commenting on our business performance in the first quarter, we will also cover the key highlights of the period and discuss our outlook for full year 2026-2027. Afterwards, we will be happy to take your questions.

The key recent highlight has been the appointment of Christoph Burkhard, as Heidelberg's new CFO, Christoph brings extensive internal and national leadership and financial management experience. His strong capital market background, deep expertise in the specialized machinery sector and a successful track record in building and expanding new business areas were key factors in the Supervisory Board's decision and position him well to support Heidelberg's strategic [indiscernible] going forward. With official start on October 1, we are pleased to welcome Christoph Burkhard to Heidelberg's management Board. We would also like to express our sincere gratitude to the current Head of Finance, Volker Herdin, for his outstanding service, unwavering commitment and significant contributions to Heidelberg.

During September, Volker will ensure a smooth transition of responsibilities to Christophe before retiring from Heidelberg. Before turning to the current fiscal year, let us first review the key achievements of the past year that have laid the foundation for our recent developments. First, we made significant progress in optimizing our cost base through disciplined execution of efficiency measures, and accelerated digitalization, we strengthened our competitiveness and created the basis for future margin improvement. Second, we successfully established the foundation of our security and defense business through Heidelberg Advanced Technologies. This represents an important step in diversifying our revenue streams and reducing our dependence on the traditional printing business.

Third, we continue to expand our digital and technology activities through partnerships and targeted M&A initiatives. The acquisitions of Manroland and POLAR as well as the intensification of our digital partnerships, strengthen our market position and create additional life cycle incurring revenue opportunities. Taken together, these achievements have sharpened Heidelberg's strategic profile strengthened our resilience and provide the foundation for the growth initiatives we are pursuing in the full year 2026, 2027 and beyond.

Now let's take a look at the key figures of the first quarter that was marked by conditions that remained challenging, which were reflected in particular in sales volume and earnings. Given that the expiration of the subsidy program in Italy alone has resulted in over EUR 60 million fewer orders in this country, in comparison to last first quarter, incoming orders of EUR 537 million were quite satisfactory. China, Japan and the U.S. were able to increase their order intake. In sales, we saw a noticeable decline to EUR 404 million, driven by the segment print and packaging equipment.

Regional-wise, also here, Italy reflected the phasing out of the subsidy program, but also other markets of the EMEA region as well as the U.S. showed lower sales volume while the Chinese market recorded a clear increase. Referring to profitability, the adjusted EBITDA margin was primarily impacted by the lower sales volume, resulting in a margin of 0.2%. Let me now turn to our strategic progress. Heidelberg continues to execute its strategic roadmap, driving high tech.

Despite the challenging market environment, the measures implemented are already showing initial positive effects. Importantly, both our core business and HD Advanced Technologies, our strategic second pillar, built on the same technological foundation, competencies, people and infrastructure, generating synergies for both sides. Our activities in HD Advanced Technologies leverage capabilities developed over decades, including software, automation, manufacturing expertise, systems integration and service and apply them to attractive new markets and mega trends. For example, our expertise in complex power distribution and control systems for high-performance printing machines, 40 meters long, forms the basis for our charging energy management and defense related solutions.

Likewise, managing thousands of EV charging points draws the same digital capabilities that connect and monitor more than 11,000 Heidelberg systems worldwide. This shared technology base creates synergies, reduces execution risk and positions us to capitalize on key growth trends such as automation, e-mobility, energy infrastructure and security technologies.

For a deep dive in our strategic progress, I hand over to David, starting with the core business.

Thank you, Jurgen, and hello, everyone, and also welcome from my side. Let's start to deep dive with our latest developments in our core business. The acquisition of Manroland is a unique strategic opportunity that strengthens our market position as system integrator while also supporting industry consolidation. It expands our customer reach by more than 3,000 customers, enhances our service and spare parts business and support the continued growth of our life cycle business. Increasing the contribution of recurring revenue is quite important for several reasons. First, recurring revenue provides visibility. Second, recurring revenue reduces macro-driven cyclicity and makes Heidelberg more resilient. Third, the life cycle business offers higher margins and will drive group profitability in the future.

Manroland's presence in 35 countries with approximately 600 employees drive and streamlines Heidelberg's footprint. Accordingly, a key benefit is the combination of our sales and service networks, stronger together. Heidelberg and Manroland represents around 2,700 sales and service employees worldwide, strengthening our presence in key markets such as China, Mexico and Latin America. Importantly, in early stage, we are already seeing commercial successes including the first sale of the Heidelberg VLS machine to MM Manroland customer, our CarfenMaster145.

Let's turn the attention to the business case. Following the successful completion of the acquisition in early July, we expected the Manroland operations to contribute a mid-double-digit euro amount to Heidelberg group sales. with no impact on the operating line in the current year. With regard to the potential for synergies, we anticipate 2 types. First, following the full integration of the Manroland operation, which is planned to take place over a 2-year period, Heidelberg expects a positive absolute EBIT contribution to the group in the low teens.

Second, and even more importantly, larger scale creates substantial leverage opportunities. Additional synergy potential is expected from the sale of Heidelberg systems plus recurring consumables business. Both contributions are expected to come in with typical margins for such business. Following the full integration of the EMA and Manroland operation, Heidelberg targets for the combined operation, a stable sales contribution of in total EUR 100 million plus with an EBIT contribution ambition of approximately EUR 10 million to EUR 15 million per year.

As already mentioned, stronger together, and we are confident that this partnership will create long-term sustainable value for our stakeholders. Another important strategic step in recent weeks was a complete acquisition of POLAR. POLAR is a highly recognized specialist for postpaid systems and has been a long-standing partner of Heidelberg. The acquisition supports our ambition to become an even stronger system integrator for our customers and contributes from different engines. By fully integrating POLAR machines and systems into the Heidelberg organization and ecosystem, on the one hand, we strengthened our position in packaging and labeling while expanding our offering along the value chain.

On the other hand, the transfer of the POLAR production to North Macedonia is a key lever for improving our cost competitiveness. Let us now switch the focus to our international expansion plans, reducing reliance on the domestic market. China recently recorded one of the strongest quarter 1 order intakes. With our strategy in place, we will further enhance efficiency to continue growing in China. Building on over a century of presence in Japan, Heidelberg's strong market position enables the company to capture future growth opportunities across the region.

In Vietnam and India, too, we are pursuing a dedicated initiative to further secure and strengthen our access to the market. The African countries are also focused markets for Heidelberg. And this means that we are unlocking new potential with a tailored strategy. In Brazil, thanks to a strong sales and service network, we see an opportunity to capitalize on the promising market growth. Packaging printing is also a key growth driver here. fueled by rising prosperity and the increasing use of paper packaging. Accordingly, sales in the first quarter of the current fiscal year more than doubled. And also promising region is Mexico, which is primarily driven by near-shoring, especially for packaging and labor.

With that, let me conclude the section on our geographic expansion strategy across customers and end markets. Equally important, our geographic ambitions to ensure further competitiveness of Heidelberg as base for stakeholder value creation. As part of our efficiency and cost optimization strategy, we are establishing a low-cost country footprint in North Macedonia. We have created a new entity, Heidelberg Industrial Solutions, operational since the beginning of 2026, starting with the assembly of post-press equipment and scalable over time. Execution is progressing rapidly. Production ramp-up commenced already in 2026, with the site expected to reach full operational capacity by 2028. The location offers a very attractive cost position at China level. combined with government support for both CapEx and OpEx.

As previously highlighted, the relocation of Polar production activities to North Macedonia will support the ramp-up. Overall, the expansion of production in low-cost countries is a key lever to structurally improve our cost base and support margin expansion. Having laid a strong foundation through consistent cost optimization, we now shift our focus with full conviction to unlocking substantial growth opportunities in new markets beyond Heidelberg for business.

And with that, I will hand back to Jurgen.

Thank you, David, and let's continue with the reflection of the latest developments in our second growth pillar. Our strategic partnership energy, is another important step in expanding Heidelberg's technology portfolio. The partnership targets the rapidly growing energy storage market and supports the diversification of Heidelberg beyond its traditional core business. Together with PHENOGY, we aim to establish a European industrial platform for sodium ion battery technology, addressing increasing demand for resilient and sustainable energy storage solutions. Heidelberg will contribute its industrial manufacturing and printing expertise across the entire value chain, ranging from procurement and production to installation, service and maintenance.

A key differentiator is the combination of PHENOGY cell chemistry with Heidelberg's specific printing technology, creating opportunities for scalable and cost-efficient battery production in Europe. The partnership also strengthens European technological sovereignty by reducing dependence on non-European supply chains. Overall, we see attractive long-term growth potential in this market and a strong strategic fit with Heidelberg's industrial capabilities.

Another important milestone was the launch of ONBERG's life demonstration hub in Brandenburg, providing customers and stakeholders with a dedicated environment to experience integrated counter UAS solutions in real-world scenarios. The facility showcases the interoperability of various defense technologies and [Technical Difficulty]

[indiscernible] will be back in a few seconds. Sir, please go ahead.

Okay. So particular emphasis is placed on the protection of critical infrastructure, a market that continues to gain strategic importance across Europe. Demand for effective counter UAS solutions is increasing as security requirements continue to rise. Recent incidents, for example, LifeTec Airport have further underlined the need for reliable and integrated defense capabilities also for critical infrastructure. Through ONBERG, Heidelberg is positioning itself as a technology and industrialization partner in a growing defense market, leveraging existing engineering, manufacturing and system integration expertise. .

While this business is still at an early stage, we continue to see significant long-term potential and remain fully committed to expanding our presence in the security and defense sector. Before turning to the detailed financial review, let me briefly summarize the key highlights of the first quarter. In our core business, we further strengthened our market position through the integration of Manroland sheetfed and the acquisition of POLAR. We also achieved the first successful VLF machine sales to Manroland customer, demonstrating the initial commercial benefits of the transaction. In addition, we continued to intensify our partnerships in digital printing and further strengthened our packaging ecosystem through targeted collaborations.

Another important milestone was the launch of our new production site in North Macedonia, supporting our ongoing efficiency and cost optimization agenda. With our second growth pillar, the -- on back joint venture commenced operations for automated drone defense while the signing of the MOU with SKYETON further expanded our capabilities in unmanned systems. HD Advanced Technologies also entered into the strategic partnership with PHENOGY. Opening access to the energy storage market and creating an additional growth opportunity beyond our traditional core business.

Overall, the first quarter demonstrated solid progress in executing our strategic priorities and further advancing Heidelberg's diversification and growth agenda. And with that, I'll hand over to Volker.

Thank you, Jurgen. Good morning, ladies and gentlemen. Let me now turn to our financial performance in the first quarter of fiscal year 2026-2027. As expected, we continue to operate in a challenging market environment. Order intake amounted to EUR 537 million compared to EUR 560 million in the prior year quarter, representing a decline of 4%. The main reason was priority of the Italian incentive program, which has significantly supported order intake last year.

Encouragingly, we continue positive momentum in China and the United States, while our order backlog increased from EUR 639 million at the beginning of the fiscal year to EUR 762 million at the end of June, providing good visibility for the coming quarters. Net sales amounted to EUR 404 million compared to EUR 466 million in the prior year quarter, a decline of 13%. The lower sales volume was primarily driven by softer demand in print and packaging equipment, particularly in EMEA and Italy following the phaseout of the subsidy program. The lower sales volume had a direct impact on profitability.

As a result, the adjusted EBITDA margin came in at 0.2% compared to 4% in the prior year quarter, is a decline of 420 basis points. At the same time, our cost measures continued to show tangible effect. Headcount was reduced from 9,228 to 9,019 employees, a decline of 2%, while staff costs decreased from EUR 218 million to EUR 196 million year-over-year. The continued realization of our workforce measures and increased flexibility in working time arrangements helped to reduce the cost base and partially offset the impact of lower sales volumes on profitability.

Free cash flow amounted to negative EUR 77 million compared to negative EUR 68 million in the prior year quarter, representing a deterioration of EUR 9 million. The development primarily reflects the lower earning levels and the typical seasonality of the first quarter.

Let me now turn to our segment performance. In print and packaging equipment, the phase out of the Italian incentive program continued to weigh on order intake, sales and profitability. Despite the lower volume environment, the implementation of efficiency measures remains on track. Digital solution life cycle once again demonstrated the resilience of its business model. Order intake increased while sales remained stable. Profitability declined compared to prior year due to the allocation of nonproduct related overhead costs.

Heidelberg technology continues its growth path, with increases in both order intake and sales. The segment continues to benefit from our diversification initiatives in areas such as defense, energy and e-mobility. Overall, while market conditions remain challenging in our core equipment business, life cycle and technology continued to support the group's resilience and strategic transformation. Let me now provide some make color on the regional development.

Starting with the EMEA, order intake amounted to EUR 241 million compared to EUR 288 million in the prior year quarter, a decline of 16%. As discussed earlier, the phase out of the Italian incentive program had a significant impact on order intake and explains the maturity decline, while niche growth areas provided some support. [indiscernible] fully offset this effect. Net sales in EMEA came in at EUR 195 million compared to EUR 252 million in the prior year, down 23%. The decline was primarily driven by bigger business, again, in Italy as well as mainly in the ALPS region and Turkey.

Turning to Asia Pacific. We saw a very encouraging development. Order intake increased from EUR 152 million to EUR 177 million, representing growth of 17% year-over-year. Net sales also improved rising from EUR 126 million to EUR 129 million, an increase of 3%. This positive performance was primarily driven by China, where we continue to benefit from solid demand and improving market momentum. Overall, Asia Pacific was the strongest contributor to growth in the quarter.

Finally, in the Americas, order intake remained largely stable at EUR 119 million compared to EUR 120 million in the prior year quarter, benefited from continued positive momentum in the U.S. which helped to compensate for weaker developments elsewhere. Net sales amounted to EUR 80 million compared to EUR 88 million in the prior year, a decline of 9%. Lower sales in the U.S. and Mexico were only partly offset by a positive contribution from [indiscernible].

To summarize, the regional picture clearly shows that the primary headwind to main the normalization effect in Italy, while at the same time, China and U.S. continue to demonstrate encouraging underlying demand trends. Asia Pacific, in particular, delivered strong performance and supported overall order intake in the quarter. Let me explain on the next page, the year-on-year development in EBITDA.

Adjusted EBITDA declined from EUR 20 million in the prior year quarter to EUR 1 million in Q1 this year, mainly driven by lower sales volumes and reduced capacity utilization. At the same time, relative product margins improved, thanks to disciplined pricing execution, customs duty refunds and improved mix effect. Ongoing cost optimization measures and workforce flexibility measures provided meaningful support and partly mitigated the volume-related pressure on earnings. Overall, the bridge clearly shows that profitability was primarily impacted by lower volumes rather than structural factors.

We, therefore, remain confident that the measures already implemented will support a gradual improvement in profitability over the course of the fiscal year. Turning to cash flow. Operating cash flow amounted to minus EUR 55 million in the first quarter, starting from an adjusted EBITDA of EUR 1 million tax and interest payment of EUR 14 million remained broadly stable year-over-year and therefore, had no material impact on the development versus the prior year period. The most important positive driver was for working capital.

Net working capital improved by approximately EUR 15 million year-over-year, reaching negative EUR 12 million, supported by lower inventory levels and significantly higher customer prepayments. This reflects our continued focus on disciplined working capital management and contributed positively to cash generation. Part of this improvement was offset by cash payments related to our ongoing transformation program. So-called Zukunftsplan, which increased from EUR 5 million to EUR 7 million year-over-year.

Additionally, pensions and other operating changes improved by EUR 9 million year-over-year. Also the position remained negative at EUR 23 million. The improvement was mainly driven by customs duty refunds and other operating effects. These positive contributions were partly offset by acquisition-related items, including the Polar transaction, higher pension obligations and lower bonus-related effects. Overall, despite the weaker earnings development, operating cash flow improved year-over-year, reflecting disciplined working capital management and continued operational focus. Moving on to free cash flow.

Free cash flow amounted to minus EUR 77 million after the first 3 months of the fiscal year, a deterioration of EUR 9 million compared with the prior year period. Compared to operating cash flow of negative EUR 55 million, investment totaled EUR 24 million during the quarter. These investments included strategic acquisitions most notably the acquisition of the Manroland sheetfed service and spare parts business of approximately EUR 11 million as well as the ONBERG-related investment. At the same time, proceeds from the sale of demonstration equipment remained broadly stable compared with the prior year at EUR 2 million.

The decline was primarily driven by the lower earnings level and higher investment activity related to our strategic initiatives, partly offset by the improved working capital development discussed on the previous slide. Finally, let me briefly comment on Heidelberg's balance sheet. Equity amounted to EUR 536 million at the end of [indiscernible] to EUR 568 million at fiscal year-end. The corresponding equity ratio decreased from 27.2% to 24.3%. The main reason was a net loss of EUR 32 million recorded in the quarter. In addition, changes in actuarial assumptions for functions had a negative effect, which was only partly compensated by favorable foreign exchange translation effect recorded directly in equity.

The [indiscernible] provision increased slightly from EUR 605 million to EUR 611 million. This was mainly due to a reduction in the discount rate from 4.2% to 4.1%, increasing to present value -- the present value of future pension obligations. Net financial position amounted to negative EUR 39 million compared to positive EUR 39 million at the end of the previous fiscal year. This development was primarily driven by the negative free cash flow in the quarter. At the same time, our financial flexibility remains strong.

Following the early extension of our revolving credit facility mid of January '26, EUR 298 million of the overall volume of EUR 436 million are undrawn by end of June 2026. Therefore, despite the seasonally weaker first quarter and the strategic investments executed during the period, our liquidity position and financing structure remains solid to continue the path to diversify Heidelberg business into growth areas such as defense, energy and ability.

So now let's summarize the key takeaways, Q1. Despite lower sales volumes in the first 3 months of the fiscal year '27, contribution margin ratio improved to 32.6%, up 110 basis points year-on-year and 720 basis points versus Q4, reflecting a normalization in operating performance. Second, our efficiency and cost optimization initiatives remain firmly on track and provides the foundation of -- for a gradual recovery and profitability. Cost discipline continues to be a key priority across Zuku. Thirdly, while market conditions remain challenging, we continue to see encouraging momentum in key growth regions, strong performance in China, and resilient demand in the U.S. partly offset the impact of the Italian incentive phase out and underlines the benefits of a diversified geographic footprint.

Free cash flow was negative in the first quarter, reflecting normal seasonality and targeted investments in future growth areas, such as defense and energy. These investments are fully aligned with our strategy to drive growth, diversification and future profitability. At the same time, our balance sheet remains solid and provides the financial flexibility to execute our strategic agenda going forward. And with that, I'll hand back to you again.

Thank you, Volker. And let me conclude today's presentation with a review of outlook. Despite the challenging start of the year, we confirm our guidance for fiscal year 2026-2027. We continue to expect net sales to remain broadly stable compared with the previous fiscal year. While short-term market conditions remain demanding, especially in some European markets, we see opportunities from regional expansion initiatives and portfolio developments. At the same time, we expect a noticeable improvement in adjusted EBITDA margin. This improvement will be supported by strict price and cost discipline.

The continued implementation of our cost and efficiency measures and an increasing contribution from higher-margin business areas. Our guidance assumes that macroeconomic and industry conditions in our core markets remain broadly in line with current expectations and excludes potential currency effects. Based on today's visibility, we remain confident in our ability to achieve the targets communicated on June 10.

In line with the group guidance, Heidelberger reiterates its segment guidance too. For the segment print and packaging equipment, we confirm our expectation of a noticeable decline in sales reflecting the continued cautious investment environment. At the same time, margins are expected to increase significantly, supported by efficiency measures and structural improvements. In digital solutions and life cycle, we still anticipate slight sales growth driven by our life cycle business with a modest margin dilution as a result of slight growth in sales.

In Heidelberg technology, we stick to our ambition of significant growth in both sales and margin, supported by strong momentum in e-mobility, energy solutions security and defense. Let me now turn to the final slide of today's presentation and summarize our key growth drivers supporting Heidelberg's long-term strategy. First, our dual use strategy creates access to attractive high-growth markets such as security and defense while leveraging Heidelberg's existing industrial capabilities. This increases diversification reduces cyclicality and strengthens the company's long-term growth profile.

Second, we continue to expand our role as a system integrator in packaging production by offering comprehensive end-to-end solutions along the entire value chain. Through partnerships, acquisitions already seen in recent weeks and targeted portfolio expansion, we create additional value for customers while increasing recurring revenue streams. Third, digitalization and artificial intelligence will further enhance efficiency and productivity throughout the organization. These initiatives will support structural cost improvements and unlock additional savings potential over the medium term.

Together, these growth drivers from the foundation for Heidelberg's future development and sustainable stakeholder value creation. Thank you for listening and looking for your questions. Saying that, let me hand it back to the operator.

[Operator Instructions]

And we have the first question from Stefan Augustin from Warburg Research.

The first one is actually on your guidance and the implied development for the next 3 quarters. So basically, we need to an acceleration in the sales and we need roughly a bit more than 1 percentage point of margin increase. So this blends in, obviously, also a bit with your acquisitions, and you have not really changed the guidance despite the acquisitions. So how should we think about that overall? Where does the confidence come from? And which is actually the biggest lever to the expected increase in the margin in the next 3 quarters. Is that -- I mean, we should see some restructuring costs at Manroland. Have they already occurred in the first quarter? Or will they come in the next 3 in this year? And is that -- let's say, -- this is the basic part. It's a bigger question, but let's say, take it from here. .

Yes, Stefan, this is Voker. Yes. To your first question. how we achieve our guidance. So the decline in group revenue to EUR 44 million and adjusted EBITDA margin close to breakeven was basically expected. It is seasonally clear in the first quarter, we always -- in our segment, we have a weak start in the business. We see, according to our plan, a normalization of sales and sales is a key issue for our EBITDA margin.

Staying with that, we are in line with our expectation and is therefore consistent with our guidance. At the same time, the performance of our 2 operating segments and regions reinforces our confidence in the underlying strength of the business and validates our strategic direction. That means our advanced new segment is coming up. We have a strong investment year this year, holding this line, however. Consequently, reaffirm also here the guidance and also on digitalize.

On the second question, the business plan ambition, the recent announcement basically are strategically important and strengthen Heidelberg's long-term positioning. That means all what we are investing this year and next year, we will take advantage we see in 2029 and '30. We cannot talk and Jurgen will come later most likely on this point on our defense topics. We cannot basically say too much about it, but our long-term and midterm planning is showing that these investments will be paid back in the upcoming years.

Okay. So on that point, I take it the most -- the largest lever on the upturn of the margin is actually coming from the near-term volume pickup in combination with your cost savings and there is nothing in a bigger amount from your current defense activities. Is that basically correct?

This is correct. The cost structure basically is on track. And with upcoming sales in the second, third quarter, we are back on track on the plant, which basically is our planning process here.

And let me comment [indiscernible] please go ahead.

Yes. Just the question then would be the follow-up is, would it be already fair to assume that the margin should expand in the second quarter year-over-year on the group level? .

Yes.

Okay. And now I interrupted you. .

No, I just wanted to comment your question on our acquisition activities on Manroland. So following the full integration of the Manroland activities. And this is what we have communicated. This is planned over a 2-year horizon. Heidelberg targets, a stable contribution of the operation of in total EUR 100 million with an EBIT contribution ambition of approximately EUR 10 million to EUR 15 million, but it will take 2 years for full integration. And it's a bulk of several single measures, ranging from optimization of the common cost base without compromising the customer relation, increasing effects of the global footprint to better respond to customer needs to the integration of Manroland IT systems into the Heidelberger environment are, of course, the key ones.

Main risks include potential customer loss of cost, discussions with labor unions and the lack of corporate identification. However, we have implemented measures to identify and mitigate these risks early and address them effectively. And of course, we need always let's call combined, of course, restructuring costs were quick wins we have to always have set in mind what would count cost. And at the end, this is what we have also communicated we see first big wins we bolt the first [indiscernible] Manroland customer. So we see a potential also for, let's say, upside let's say effects here.

The next would be on the free cash flow development. I mean, CapEx obviously went up also on the purchase of Manroland. Your strategy overall expects us to do more investments. So how should we think overall on the cash generation in this full year? .

Yes. On our on our free cash flow situation. The weaker performance compared to prior year primarily reflects 3 factors: first, the seasonal inventory buildup, which is typical in the first quarter. Second, the higher net loss compared with the prior year period. And third, investments associated with the integration of acquired business and expansion of our defense activities. We always said it's a very strong investment year this year and next year, and the return will come in the following years. So basically, it's -- currently, our situation is as we have planned it.

So for that, we are very positive to be reaching basically also on the free cash flow our planned target. And our financing structure is very solid and holding and keeping basically some pressure.

Could you remind me of your planned target for the free cash flow?

We have no target because we have a target. But we are having the free cash flow not in our guidance. So we will have a significant investment year this year., ,but there's no clear number, which we will announce at this time.

[Operator Instructions]

And the next question comes from Thomas Wissler from mwb research.

Yes, I have basically 3 questions. First of all, you mentioned that Christoph Burkhard will take over as the CFO as of October 1. And could you talk a little bit about what drove the Supervisory Board decision and what you expect him to bring to Heidelberg going forward? The second question would be regarding your solid balance sheet that you already mentioned in your patient -- what needs to be in place before you consider bringing back the dividend or potentially during share buybacks? And how should we think about your capital allocation priorities from this point of view? -- from this point in time?

And finally, also a question regarding your free cash flow generation this year. I understand that you cannot give us concrete guidance here, but maybe you can just give us some idea about the trajectory of your free cash flow this year. Is it right to assume that Q2 will be still negative and that we see a gradual improvement in the second half. Thank you very much.

Thank you, Thomas. I will start with Christoph Burkhard. Christoph Burkhard, I think with him, we gained -- we have gained a CFO with extensive international leadership experience. And in particular, he's a long-standing capital markets expertise. And his broad experience in the specialty machinery industry, and his proven track record in developing and scaling new businesses -- business areas, make him an excellent fit for Heidelberg's next phase of growth.

Second question, Volkar.

The second question is -- was your question. When we we expect to pay dividends when is the right time. So basically, on that, that also depends on the business success. That's why I answer your third question first. The current cash flow situation we have since the current year, we expect basically less cash out until end of this year compared to the first period but we stay negative. This is very clear for our current year. And however, that we keep the order level, as I mentioned it to Stefan already before. So and this is according to plan.

Basically, on your questions about the dividend payments. The realization of capital allocation is designed to long-term shareholder value creation in our house. Main focus of Heidelberg's capital allocation is investing into new business areas, as you mentioned, technology, defense, energy. This promising attractive return on investment. This is our main focus, which could also include smaller M&A transactions. So strengthening the core business is ranked #2 followed by shareholder distribution in [indiscernible]. And this is our long-term plan, and this is our strategy, and we keep that. I hope I answered your question.

Yes. But maybe just 1 follow-up. Do you have any further M&A targets, which we might see in the next couple of months?

Regarding the defense sector, we are working on several cooperation agreements, and we will open this up, of course, in the next weeks and months. For the core business, I think we were set -- we have to integrate Polar and the Manroland activities, and this was a huge step for us. And therefore, we're working on that very, very closely.

Thank you. So at the moment, there are no further questions. [Operator Instructions] And we have a follow-up question from Stefan Augustin from Warburg Research. .

The next one would be actually on PHENOGY. Can you outline a little bit how this actually works how this cooperation agreement is set up? Is that a kind that you provide a service into this cooperation or especially with the printing process and the battery. How do we need to think about this and this potential? How does it work out? .

Yes.l start with the idea, of course, the PHENOGY is that we indicate to establish a joint venture. And Heidelberg contributes industrialization. Of course, the long-standing expertise in system integration and installation, production technology, as you said, also printing technology, electronics, battery management system. This is where with amplified infrastructure, testing and service into the partnership, while PHENOGY contributes chemistry, product and market expertise and subject to a successful expansion of the calibration, PHENOGY and Heidelberger intend to establish a joint venture to further strengthen this partnership and accelerate growth in the stationary energy storage market.

And at this stage, it would be premature to make binding commitments regarding potential future options, including also ownership structures of possible joint venture. And such matters will be discussed between the partners internally at the appropriate time. And any resulting agreements will be communicated publicly once finalized. This is maybe the principle setup. And of course, we are using our printing technology, mainly and our automation and system approach. -- and system integration capabilities. This is the main driver. And yes, we are convinced that this will drive the market of these storages .

So I understood it correctly that basically, in the end, you would like to produce better result together with the partner?

That's a system yes, a complete storage the complete battery energy storage system made in Europe and based on sodium ion battery technology.

Okay. But you also do, let's say, basically also the battery yourself, it's not that this battery is then with your technology produced in China also.

No, no, no. This is completely independent from China is everything made in Europe. And it's a turnkey solution for commercial and industrial customers.

Okay. And the next 1 is actually a bit on ONBERG and your defense activities. I mean, obviously, as you said, the more drones are around planes somewhere in Germany. The more focus will be on protection of the air fields. So I'm not looking actually for a concrete guidance, but I would -- can you tell us a little bit what happened in the discussion points with all the partners over the last 2 to 3 months. Is it that more let's say, more parties are interested in that? Is it the government side is actually rather scrambling for solutions. Is there changes in the setup, who is actually going to purchase something or things like that without actually saying this is the potential. .

The main problem is Stefan, that we cannot talk about anything mostly. We are totally right. There's a lot of information, a lot of activity, a lot of visits, a lot of customers at our life hub in Brandenburg and we had several sessions with several people, but no 1 of them wanted to be public because it's part of the safety system that you do not concrete say what you are using also as a defense system, yes? So this is mainly secret. But as you said, there's a lot of traffic in this area now.

And we have no further questions at the moment. [Operator Instructions] We have no further questions. .

Yes. Then thank you very much for your interest, and see you next time. Thank you. Bye-bye.

Good morning, ladies and gentlemen, and welcome to Heidelberg's conference call regarding the announcement of our strategic partnership with Manroland Sheetfed. We are delighted to welcome our investors and analysts. Heidelberg is 175 years old and in the market together with Manroland also more than 150 years. So this is not an everyday transaction and opportunity. It's a transaction which supports the organization and optimization of Heidelberg's cost base and reflects our commitment to maintaining a strong and reliable global service network in the print and packaging industries for our customers.

It's an awesome moment to bring Manroland Sheetfed on board as a second strong brand. And for more detail, let me now hand over to my colleague, David.

Yes. Thank you, Jurgen. Yes. Good morning, everyone, and also welcome from my side. Let's start with the rationale behind this strategic move. Stronger together is our -- driving our vision to strengthen Heidelberg's global service capabilities in the print and packaging industry. Heidelberg supports stabilization on the supplier side. With this transaction, we achieved several key objectives ranging from expanding customer reach to strengthen the service and spare parts business into unlock growth potential.

Furthermore, the partnership with Manroland aligns with the consistent sustainable expansion of our service and life cycle business. Increasing the contribution of recurring revenue is important for several reasons. First, recurring revenue provides visibility. Second, recurring revenue reduces macro-driven cyclicity and makes Heidelberg more resilient. Third, the life cycle business offers higher margins and will drive group profitability in the future. Overall, we see strong potential for this partnership to create long-term sustainable stakeholder value.

Before we outline the business plan for this partnership, let us provide more details on the Manroland assets that Heidelberg will integrate. Manroland's customer base, its global service network, including logistics and its installed base of more than 3,000 machines are a perfect fit for Heidelberg. Combined with the relevant intellectual property, technical documentation and engineering expertise, these assets enable us to continue supporting customers and further develop our service, spare parts and consumables business.

Manroland's presence in 35 countries with approximately 600 employees drives and streamlines Heidelberg's footprint. Let us now turn our attention to the business case. For the current fiscal year and dependent on the closing date, we expected the Manroland operations to contribute a mid-double-digit euro amount to Heidelberg's group sales with no impact on the operating line.

With regard to the potential for synergies, we anticipate 2 types. First, following the integration of the Manroland operations, which is planned to take place over a 2-year period, Heidelberg expects a positive EBIT contribution to the group in the low teens.

Second, additional synergy potential expected from the sale of Heidelberg Systems with annual revenues in the mid-double-digit million range plus recurring consumables business in the low double-digit million range. Both contributions will come in with typical margins for such business.

Following the full integration of the Manroland operations, which is planned over a 2-year period, Heidelberg targets a stable contribution of the operations of in total, EUR 100 million with an EBIT contribution addition of approximately EUR 10 million to EUR 15 million per year. As we said at the beginning of our presentation, "Stronger Together", and we are confident that this partnership will create long-term sustainable value for our stakeholders.

Thank you very much for listening and for your attention. Now we would like to take your questions.

Stefan Augustin.

Yes, I hope you can hear me.

Yes. I also can see you.

There is -- first is actually a clarification. So if I just want to come back on the business outline. So did I understand that correctly that you said in the beginning, you expect from the recurring revenues mid-double-digit amount and correspondingly a positive EBIT contribution in the low teens. So let's say, EUR 10 million.

Yes.

And then later on, you expect EUR 100 million and the contribution in an EBIT margin of 10% to 15%. So in absolute numbers, 10% to 15%. Is that how I read -- need to understand...

Yes, exactly. So both messages are correct. The first message was for, let's say, this fiscal year, depending on the closing date that we are expecting mid-double-digit contribution in terms of sales. And of course, in the long term, meaning in 2 years with the full integration, we're expecting EUR 100 million sales with an absolute EBIT contribution of EUR 10 million to EUR 15 million.

The first one was not a margin. So EUR 5 million EBIT to EUR 15 million sales, but it is EUR 10 million EBIT to EUR 50 million sales. And my following question would be...

EUR 10 million to EUR 15 million EBIT contribution.

That's for the EUR 100 million...

It was a EUR 100 million -- it was the first one...

And for the [beginning] because otherwise, I would ask why the operating leverage is so low, but just to be absolutely sure that I understood.

It is also depending on the closing date.

So it's then the low teens is not an absolute amount, but it is a margin. Is it correct?

Yes. Yes.

Okay. Good. Understood. So sorry for the massive confusion.

[indiscernible]

And then the second one is -- you outlined that you need to make some restructuring and you didn't make a comment to the price. But as you referred to EBIT and your standard, let's say, KPI is the EBITDA, I would assume there is not a lot of difference between EBIT and EBITDA in this case. So respectively, I don't think there is...

This is Volker speaking. There is a difference between EBITDA and EBIT because the EBIT is on the long term and EBITDA on the long term is the same. However, in the integration year, we need to -- for the synergies, we have to pay for the synergies, certain money because we are not -- on the long run, we are not taking over all the employees. We need them for the intermediate period. And after the integration period of 2 years, we will have an integration plan where we have a certain percentage to let go. And for that, we have to pay and that you will find this year in the EBIT, but not in the EBITDA. So the EBITDA is adjusted according to those costs.

All right. And then I saw in the small footnotes, you take over the IP not for the 700 Manroland, but therefore, for the large-format machine. So I assume you continue to pursue your strategy to enter the very large format still. Is that correct?

At the end, at the actual moment, we are evaluating the possibilities how to continue the very large format because at the end, it's somehow a portfolio which is needed for the market. But so far, the decision has not been taken. We will do that.

Okay. And by the thinking, say, as you find in the press, Roland outlined a little bit that it had problems to sell China. Machines in China, and that is obviously one of your strengths. So if I do put all the pieces together, I would assume there is a certain possibility to use your strong Chinese manufacturing base and at the same time, expand your addressable markets and your network. So overall, that sounds to me like a very decent and good strategy.

Yes. It is a perfect fit.

Yes. It is a 100% perfect fit. And Roland is having the biggest organization in China today and combining our organization with the Roland organization, I think, will enable a potential for us for further growth. And as you are absolutely right that we have a strong footprint in China, and this will be even more accelerated with this transaction. So -- and then we will have, of course, pretty fast our focus on these markets, especially to China to drive that growth.

Seems to be no further questions.

Wait for another 30 seconds.

Yes, then thank you very much for your attention, and see you soon.

Thank you. Bye. Bye-bye.

[indiscernible] of the final figures of fiscal year 2025, 2026, Analysts and Investors Conference of Heidelberger Talk Machine AG. This conference call is being recorded. [Operator Instructions] Let me now turn the floor over to your host, Jurgen Auto.

Good morning, everyone. Before we start with the official part of this presentation, we would like to thank our Board of Directors for extending David and my contracts ahead of schedule, allowing us to continue the execution of our long-term strategy. Let us now officially begin today's presentation with a short review of last year's performance and summarizing our key achievements in full year 2025, '26. Overall, we made strong progress on both our strategic initiatives and cost measures, which translated into improved structural cost indicators as well as a better result before and after taxes. This is laying a solid foundation for our future development.

Let me highlight the key cost savings achieved in 2025, '26. Within our tokens plant, we concluded more than 550 exit agreements in Weslock to structurally adjust our personnel cost base. We reallocate the production of the CX 104 to China. The launch of our low-cost country footprint in North Macedonia and we accelerate our key digitalization initiatives. In addition, we made substantial progress in executing our strategic transformation in that context, the following developments are particularly North worthy.

First, we further expanded our digital business, including the ramp-up of digital print through strategic partnerships with Canon and Rico. Second, we signed a strategic partnership agreement with Masterwork, significantly expanding the scope and depth of our collaboration beyond the previous sales cooperation. Third, we completed the integration of Polar, further enhancing our market position and operational platform by striving for further M&A even extend our position as a leading player in our industry.

Fourth, we successfully transformed Amplify's business model from a hardware-focused player to a fully integrated solutions provider in charging technology. And as most promising driver for future growth, we established a further pillar in security and defense successfully initiating our activities in high-growth and future-orientated markets.

Taken together, these measures have started to improve our cost base and earnings profile, reinforcing the foundation for sustainable and profitable growth going forward. They are crucial to securing Heidelberg's long-term competitiveness.

With that, I hand over to Volker.

Thank you, Jurgen. Hello, everyone, and welcome from my side. Fiscal year 25, 26 marked a year of setting the strategic direction for Heidelberg. With mentioned key initiatives already underway and partly delivered providing a solid foundation for our mid- to long-term ambitions. Despite geopolitical tensions, and the volatile macro environment, Heidelberg demonstrated resilience, delivering order intake of around EUR 2.25 billion and a slight growth in net sales to roughly EUR 2.3 billion with a clear improvement in momentum towards the fourth quarter.

At the same time, the adjusted EBITDA margin reached out at 6.6% affected by continuously negative currency effect and customs issues in U.S., a weaker product mix and accelerated investments in new promising activities outside the core business. Net result tribute to EUR 15 million compared to prior year. This strong performance was primarily driven by an increase in EBIT of EUR 6 billion as well as an improvement in the financial result of EUR 4 million.

Furthermore,we strengthened our balance sheet reflected in an improved equity ratio of 27.2% and solid net financial position. In absolute terms, equity increased to EUR 568 million, supported by higher net income and favorable function effects. Headcount decreased from 9,309 to 9,065 resulting in approximately 6% personnel cost savings. Excluding the restructuring provision booked in fiscal year '24, '25, the net impact amounts to EUR 23 million.

Operationally, we delivered positive cash flow of EUR 36 million, while free cash flow of negative EUR 19 million reflects lower prepayments and restructuring. In fiscal year '25, '26, Heidelberg continued to operate in a challenging environment with geopolitical uncertainty including tariff discussions and the Iran conflict, weighing of customer investment behavior. Heidelberg was not immune to these market conditions and external circumstances in fiscal year '25, '26.

As a consequence, order intake came in at EUR 2.25 billion as expected below the prior year tube with a book-to-bill ratio of 0.98. It is important to flag at this point that customers still rely on Heidelberg products and services and has not opted for the solutions in the meantime. Cancellations are and remain the exception. Summarized, underlying demand remained resilient overall, supported by our global diversification which continues to provide revenue visibility and stability despite ongoing currency headwinds.

Let me now turn to our guidance for the fiscal year and how we delivered against it. The overall performance can be described as satisfactory despite external headwinds. Net sales came in at EUR 2.293 billion, slightly above the prior year for 2.4% below guidance due to currency effects, while constant currency sales reached EUR 2.362 billion and were fully in line with our expectations. At the same time, adjusted EBITDA margin reached 6.6%, falling short of the guided improvement to up to 8% in a challenging environment.

While operational discipline, progress in new business areas and higher earnings before and after taxes underline the continued execution of our strategy. Having discussed our performance in delivery against guidance, let me now turn to our strategy and how we are positioning Heidelberg for a promising future.

With this, I hand over to David.

Thank you, Volker. Hello, everyone, and also welcome from my side. I will start with an update on our strategic progress, focusing on strengthening our core business. In packaging, this means clearly positioning Heidelberg as an end-to-end system integrator across the value chain. We have expanded beyond printing and converting into upstream and downstream processes. With a strong focus on measurable customer outcomes, higher OEE, reduced downtime and faster time to market.

Packaging remains a core growth driver, supported by structural trends and our strong exposure to attractive segments such as pharma, food, labels and luxury packaging. The key differentiator is our connected and integrated offering, enabling digitalization, traceability and serialization. This increases customer relevance, particularly in regulated and brand-sensitive industries and support value-based pricing.

To accelerate this transformation, we are building a strong ecosystem of partners allowing us to expand capabilities with relatively low capital intensity and extend our reach along the full packaging chain.

Building on our strength positioning as an end-to-end system integrator, the next step is how we extend this into a truly integrated ecosystem. At Interpack, we demonstrated how we bring together materials, production and logistics into seamless workflows going well beyond traditional printing. The key enabler here is our digital layer, where we integrate capabilities such as serialization, authentication and traceability, allowing customers to create fully transparent and data-driven packaging processes.

At the same time, we are strengthening our positioning and sustainability, combining high-performance substrates with our process expertise to enable more efficient resource saving production. All of this translates into clear customer benefits, higher automation, greater transparency and faster end-to-end processes. Overall, this shows Packaging business into a fully integrated scalable and future ready solution offerings.

The print market is becoming increasingly hybrid with shorter run lengths more small jobs and growing cost pressure, combined with a shortage of skilled labor. Our answer is to provide fully integrated workflows, combining offset and digital technologies giving customers the flexibility to adapt to these changing requirements. At the same time, we are moving towards autonomous production enabled by AI-driven solutions such as Pinectad-free, which automatically optimizes production decisions across the entire workflow. A key pillar is our life cycle business, where data-driven services help maximize uptime, reduce downtime and put customer investments.

With the global service network of around 2,300 experts, we ensure high availability and increasingly extend these capabilities beyond print into adjacent industries. This transforms Heidelberg from a machinery provider into a digital service-driven solution partner with recurring revenue potential. With our Connect Touch-free workflow software, we have achieved a milestone in the automation and AI based out optimization of production planning and control in commercial printing including hybrid printing, which gives us a clear competitive edge in the global market.

Here, we intelligently integrate various printing technologies with prepress and post-press into a comprehensive system. This system not only controls individual steps as is typical with traditional automation, but also calculate and manage all processes autonomously. Here, we create measurable added value for our customers across the entire life cycle through connected solutions, intelligent data models, sustainable technologies, consumables and global service excellence.

Let us now switch the focus from our product strategy to our international expansion plans. China recently recovered -- recorded its strongest order intake in a long time. With our new targeted strategy will further enhance efficiency to continue growing in China. In India, too, we are pursuing a dedicated initiative to further secure and strengthen our access to the market. The African countries and Vietnam are also focused market for us. This means that we are unlocking new potential with tailored strategies. In Brazil, thanks to a strong sales and service network, we see an opportunity to capitalize on the promising market growth. Packaging printing is also a key growth driver here, fueled by rising prosperity and the increasing use of paper packaging.

We are now also seeing positive trends in Mexico over many quarters. driven primarily by nearshoring.

With that, let me conclude the section on our geographic expansion strategy across customers and end markets. Equally important are the geographic plans to ensure further competitiveness of Heidelberg as base for stakeholder value creation. As part of our efficiency and cost optimization strategy, we are establishing a low-cost country footprint in North Macedonia. We have created a new entity, Heidelberg Industrial Solutions, operational since beginning of 2026, starting with the assembly of post-press equipment and scalable over time.

Execution is progressing quickly. Production starts already in 2026 in an interim setup, while the finance side is being developed with ramp-up towards 2028. The location offers a very attractive cost position at China level, combined with government support for both CapEx and OpEx. Overall, this is a key lever to structurally improve our cost base and support margin expansion. Having laid a strong foundation through consistent cost optimization, we now shift our focus with full conviction to unlocking substantial growth opportunities in new markets beyond Heidelberg's core business.

And with that, I will hand back to Jon.

Yes. Thank you, David. Building on our strategic progress and the investments we have made, we aligned closely with the German high-tech agenda, which identifies around EUR 1.7 trillion of untapped potential where we see attractive opportunities for Heidelberg to participate in selected high-growth areas. In AI and robotics, we already leverage strong capabilities in software and automation, including our Prinect ecosystem and process electronics.

This from scalable foundation to expand into industrial automation and AI-driven applications beyond our core markets. In Climate Neutral mobility, we are building on our strength in sensor-based control, industrial logistics and connected technologies to participate in the transformation towards more sustainable and automated mobility solutions. In electric and electronics, we benefit from our engineering expertise and manufacturing capabilities here in Germany, enabling us to provide high-tech components, center integration and industrial control systems.

Especially Hyder-roven skills in tics and microelectronics are a key enabler to enter and develop in defense industry. In accordance with this high-tech agenda, we position Heidelberg as a partner for rapid industrial scaling with HD Advanced Technologies, we are establishing a further growth pillar, leveraging our existing industrial and engineering capabilities and capacities to expand into new compelling high-tech markets.

What sets us apart is that we don't start from scratch. About 80% of the required technologies expertise and capacities come directly from our core business enabling a fast and efficient market entry. So we are ready. This is built on a broad improving capability base from precision engineering, including casting, machining and mechatronics to system integration, combining sensor technology, measurement systems and control software to electronics and software including power electronics and embedded development and extending into digital monitoring and life cycle solutions such as remote services, performance optimization and AI.

What is critical is that we combine all of these into end-to-end industrial solutions, and this is exactly our USB. This enables us to take existing technologies, industrialize and scale them efficiently into new applications. Accordingly, we are targeting with HDAT global megatrends, such as security, energy, robotics, AI and mobility and we built a new scalable high-tech business for Heidelberg.

Building on this proven operational foundation, which rely on spanning infrastructure, technology and end-to-end capabilities and long-standing track record, we will now highlight our latest achievements. End of July 2025, Heidelberg starts in Defense journey signed the MOU with Encore Advanced Systems. Between coring as a strategic partner, Heidelberg has established a collaboration aimed at the development of industrialization and construction of energy control and distribution systems.

In this way, the alliance will help boost technological suvereinity and safeguard domestic value chains. The partnership is progressing according to plan with first revenues already generated in full year 2025, '26. As another important milestone, Heidelberg enters the Citis sector and signed the MOU with Andes in December 2025. The critic market we are addressing is large and supply driven accordingly high promising and quite attractive. Critical infrastructure is cross-sectoral and will become increasingly regulated with more than 2,000 operating sites in Germany alone.

What makes this particularly compelling is that investments are nondiscretionary regulation and security requirements. The market is also structurally attractive with recurring revenues and replacement cycles, creating long-term visibility. This is exactly the type of market where our capabilities create strong differentiation.

In addition, demand is highly civil and defense applications, providing a high degree of resilience. Combined with strict regulatory requirements this results in a large, stable and scalable market environment. Overall, this represents an attractive fit for Heidelberg's system integration and industrialization capabilities positioning on bag as a one-stop shop for autonomous counter-drone solutions.

A cornerstone of Heidelberg's defense strategy is on Berg, our joint venture with Andes established in recent months. Here, we combine a leading proven drone technology with our engineering and industrialization competence to develop defense solutions addressing the European market for ensuring Europe's security. The ambition is clear: building a one-stop shop for autonomous counter-drone solutions, especially for critical infrastructure.

We follow a phased approach, starting with market access and distribution, moving into localization and ultimately, industrial scale production in Germany for Europe. From a timing perspective, we are progressing well. Approvals are underway and first revenues are expected towards year-end. This is a disciplined and scalable entry into a highly attractive regulated market.

Expanding into new businesses areas requires an appropriate organizational structure. In this context, HD advanced technology loss established. With HDAD, we are not just particular new markets. We are actively building a new growth business, a second engine for Heidelberg. We start from a position of strength leveraging our existing core competencies and precision engineering, system integration and industrialization. On this space, we developed technology partnerships particularly in the U.S. and Israel, giving us direct access to leading-edge innovation.

Our role is to industrialize these proven technologies and bring them into scalable, market-ready solutions, where Heidelberg's capabilities create real differentiation. This enables us to address attractive supply-driven markets in Europe and beyond, including security, defense and other high-growth applications.

Overall, this is a clear buildup story from core capabilities to part to scalable industrial businesses, creating a new sustainable growth pillar for Heidelberg. But Heidelberg's defense activities are not limited to partnerships and collaborations, our proprietary UTV development highlights our strong in-house capabilities to drive and scale defense projects. Now we start the video.

[Presentation]

At the same time, we are expanding into charging infrastructure operations and opening our service network beyond the print industry. Our subsidiary Amplify operates according to its free-tier business model. One, Amplify provides operational management services to corporate clients. This segment is growing organically by over 10% annually and generates stable cash flows. Examples of corporate client SAP and Siemens Energy. Second, Amplified intu's operational management at public charging stations and logistics sites. Their focus is on maximizing availability through recurring monthly fees.

Our next goal is to enter the market with our own DC products in the second half of the fiscal year. Amplify offers services for third-party hardware. This is the third point, as many customers operate multiple brands. These activities have also already begun. Initial revenue from customers has been generated and numerous accounts are currently in contract negotiations.

Building on this strategic positioning, let me now turn to our outlook and the guidance for financial year 2026, '27 million. Looking ahead to full year 2026, '27, we see no signs of a material improvement in the economic environment and anticipate continued challenging conditions. Accordingly, we expect stable net sales at around prior year's level and a noticeable improvement in adjusted EBITDA margin. Our guidance is supported by 3 key levers: targeted regional and portfolio expansion, ongoing cost discipline and increasing benefits from our Tucuman.

For the first time, we are also providing guidance at segment level. further increasing transparency on our business development. In print and packaging equipment, we expect a noticeable decline in sales, reflecting the continued cautious investment environment. At the same time, margins are expected to increase significantly supported by efficiency measures and structural improvements.

In Digital Solutions and life cycle, we anticipate slightly sales growth driven by our life cycle business with a temporary slight decline in margin due to mix effects and the ramp-up of digital business. In Heidelberg's technology, we expect significant growth in both sales and margin, supported by strong momentum in industrial applications such as e-mobility as well as security and defense.

Overall -- and increasing contribution from higher growth, higher-margin businesses. Taking a step back to summarize the key drivers behind our outlook and midterm development. First, our dual-use strategy, expanding into high growth, less cyclical areas through HD advanced technologies makes our business more resilient and strengthens long-term growth. Second, system integration and packaging by offering end-to-end solutions across the value chain, we clearly enhance our value proposition and differentiation.

And third, efficiency and cost discipline, increasingly support by digitalization and AI, which will drive further savings and margin improvements over time. Together, these drivers underpin our strategy and give us confidence in delivering sustainable, profitable growth. Thank you very much for listening and looking for your questions.

[Operator Instructions] The first question is from Stefan Augustin from RaboResearch

So the first one is quite obvious on the guidance theme. You have...

I cannot hear you.

You cannot hear me.

Connection issue, I suppose because I can hear very well, Mr. Augustin, please stay under line. Thank you. I would suggest dear host could you please dial in again. There seem to be a network issue. Please hold for a little while longer. We are right back. Yes, we can hear you now. Could you please repeat your question? .

Yes, sure. And I hope everybody can hear me. It is actually on the guidance, and you have relative targets for the respective segments. And I wonder if you can clarify a little bit what is meant with the different wordings. I mean, flat is obviously quite clear, but what is a significant or a very significant increase or improvement?

Yes. This is Volker Herdin speaking. I can answer your question. We have on a flat. We have a bandwidth between 0% and 1%. We have light between 1% and 5% between 5% and 10%. We have basically significant and over 10% is strong or dramatic.

Okay. And so -- when we think about Heidelberg technology, obviously, we come from a quite low base. So the above 10% is in absolute terms, not so much. Can you hear, let's say, have a direct absolute scope. So should we look for something like rather EUR 50 million or EUR 20 million or EUR 100 million? .

Basically, on the -- and overall, we come back and back to a level, especially in premium packaging equipment back to levels seen in '24 in the business year fiscal year '24, '25. On the digital solutions life cycle, we will increase, and we have a revenue growth-driven dip in adjusted EBITDA margin. And in technology, we have a low to middle double-digit percent increase in sales and in adjusted EBITDA, impacted by ramp investment expenses in HTA in a strong increase.

Okay. But, you would -- I should expect still losses at Heidelberg Technology? .

Yes, we will have -- especially in this fiscal year, high investments and high free payments for growing, especially this business. And since Advanced Technology includes from now on Amplify and our industry product especially amplified, we need to scale up and into defense we need to scale up. This will be also for a strong draw for cash; however, it's a secure our future in the following years.

I fully understand that one. On the new production facility in Macedonia. You mentioned that this is post-press production partially. So is there relocations to be expected? And is that, let's say, pointing to a one-off for the transition of, for example, Ludwigsburg, where we currently produce the postpress equipment?

So he David Schmedding speaking. So part with post-press equipment mainly for Polar, first and some components. So we are ramping up and we're building the expertise on site. And maybe let's see how things are developing, of course, ideas also to transfer also other first of all, easier would say products to the site. And afterwards, we will -- from time to time, of course, we are running this up to more complex products, but this is a plan.

And then finally, before I go back into the queue. Can you give an update on how the market and the order intake has continued in China versus your last statement a couple of weeks ago. Do we still continue to see a good demand?

Yes. So David speaking. -- mismanaginspeaking, so a clear statement, yes. So the trend is continuing. So luckily, the trend is pretty positive over the last weeks, and we expect also to be continued.

At the moment, there are no further questions. [Operator Instructions] The next question is from Norbert Code from Dr. Kalvoda Research.

Okay. Hello, good morning to you hear me. Thank you so much for your presentation. I have 2 questions. The first is, so you have this software platform preneed, maybe you can tell us or give a shed some or give us some more details about how many clients use this or how they use the cloud service or the software as a service? And the second question is you mentioned the new business will contribute with EUR 300 million sales until 2029. And do you expect the biggest share of that in '28, '29 or do we see still in '26 and '27, yes, relevant success? Thank you so much.

So first of all, answering your question on Kinect. So today, we have thousands of customers using our cloud services First of all, starting, of course, with the premium model with our Heidelberg portal or customer portal customer success to this portal. And this portal is designed to the customers can, let's say, buy additional licenses. So this is the starting point. And of course, connect environment, our workforce software especially highlighting our Prinect touch free as the new development, connecting the different different printing technologies.

We have also a couple of, let's say, thousands of customers paying for this on a monthly basis. So here we have only a subscription model avails customers have to buy a subscription on a monthly basis and they have to pay our services. So this is on Prinect and going into the future. The touch free topic, it's AI driven. So we're helping her customer to improve efficiency and effectiveness of the production workflows by automatically, let's say, helping them to drive that production. The share of, let's say, the sales over the next years -- so of course, we have a clear target and it has been communicated in a 3-year plan with the EUR 300 million on top growth coming from our new areas.

This has been communicated. And of course, we are expecting also first revenues in this fiscal year. First, revenues on a small scale, as Joao said, for the core business are in but the further ramp up, of course, as part of our plan. And we are still targeting all the first results to be shown in this fiscal year.

Thank you very much for your questions. [Operator Instructions] Assume no further questions to be incoming. So thank you very much, ladies and gentlemen. There is a follow-up question from Stefan Augustin Babak Research.

Yes. Thank you. Some smaller follow-ups. Can you elaborate a little bit what is the expansion with the Masterbug operation? That would be the first one. The second 1 is, would you give us an update on your plans for the entry into the very large format segment. And finally, should we expect from the Omberg JV, say, significant or a reasonable deterioration in the financial results?

Yes. Thanks for your question. So first of all, talking about the expansion of the MK, let's say, corporation, yes, last year, and this is something which we have communicated. We extended the cooperation contract for 10 more years. So maybe being the, let's say, distributor and also service provider for MK products outside of China. We extended here also the scope of the portfolio, which is part of the corporation. So covering more of, let's say, the relevant machines for the packaging -- post-press packaging industry.

Just 1 example is corrugated as just 1 highlight here. And of course, this is also something what we are have in our pockets with the development, joint development of the machine with some expertise from us produce them at MK in China. This will be somehow announced in the case of the year, but we are close to, let's say, the market entry. So this is the first point on MK, VLF, and please excuse me, there's no change compared to our last communication of Portware following, let's say, the market development, what's going on. And as soon as we have some updates here, we will let's say you will be the first 1 where we communicate any news.

Yes. And Jorgen also speaking for Amberg, of course, we expect business with Heidelberg. We have a very attractive booth at ELA in Berlin starting today, and we have -- we expect an MOU to be announced tomorrow. So these defense activities, they have a full pipeline and multiple opportunities, and these are in development. And more to come and listen tomorrow, I would say.

Yes, fully understood. First, the question is that you consolidate the JV in the financial result, and I would expect a negative net in the JV in the first year. So the question is if this is something that is of scope, we should, let's say, it's in our forecast?

No, this is not significant, yes.

And the last 1 you pointed a couple of times out to more investments into HD how should we think about free cash flow in '26, '27. I know it's not a guidance KPI, but just more.

Yes. Basically, the expansion, especially in this segment is significant. So it requires significant repayments and we it is fair to assume that investments in defense will weigh on FCF in a larger scale, leading to a negative -- clear negative generation next year, this business year. And from after the business year in the following years, that will then count turn into positive profitability.

Thank you very much for your questions. With that, we close the Q&A session, and I hand the floor back over to the host.

Yes. Thank you very much, and see you soon. Bye-bye. Bye-bye.

Good morning, ladies and gentlemen, and welcome to the conference call for the publication of preliminary figures FY 2025/'26. [Operator Instructions] Let me now turn the floor over to your host, Jurgen Otto.

Good morning, ladies and gentlemen, and welcome to Heidelberg's conference call and our preliminary financial results for fiscal year 2025/'26. We would like to give you some insight on the financial performance of last fiscal year, while our strategic outlook and financial guidance will be presented to you in our press conference dated the 10th of June 2026. Fiscal year 2025/'26 was characterized by setting the right strategic direction for Heidelberg with a great amount of projects and measures which we initiated and partly already finished. We will summarize at a later stage of this presentation, but to tell it in a nutshell, we have set the right points for the mid- and long-term development of Heidelberg.

Operational-wise, we are looking back at a challenging and volatile external environment with increased geopolitical tensions such as Iran conflicts. But even in these uncertain times, Heidelberg continues to make targeted forward-looking investments in new growth areas, particularly in security and defense. We are of the firm belief that this will strengthen the foundation for future profitable growth. Despite the visible headwinds, Heidelberg demonstrated resilience, disciplined execution and continued progress on its strategic priorities. Order intake amounted to EUR 2.2 billion, which we expected comparing to a very strong prior grouper year. Adjusted for currency effects of EUR 71 million order intake would have reached around EUR 2.3 billion, reflecting a stable underlying demand environment. Importantly, momentum improved towards year-end with Q4 representing the strongest quarter of the year. Net sales totaled EUR 2.3 billion and remained stable year-on-year despite FX headwinds of EUR 69 million.

On the observing side, group operational performance was primarily impacted by margin pressure in print and packaging. A weaker macroeconomic environment, including softer demand and pricing delayed investment decisions and timing related upfront expenses in technology growth areas weighting on overall performance. These effects were partly offset by strong cost discipline with personnel expenses, excluding restructuring, reduced by EUR 23 million supported by a roughly 3% reduction in head count from 9,300 to 9,065 employees.

Further functional costs also came in below prior year levels based on strongly executed initiatives. As a result, Heidelberg delivered an adjusted EBITDA margin of 6.6% despite external pressures, negative currency effects of around EUR 20 million and accelerated investments in growth areas such as security and defense. Heidelberg closed the year with a positive net financial position of EUR 39 million and further strengthened its financial flexibility by extending its syndicated credit facility to 2030, albeit the challenging market conditions and pressure we have observed fiscal year 2025/'26 in total demonstrates improving operational quality, disciplined cost management and continued strategic momentum, positioning Heidelberg well for the future.

Volker, I may pass on to you for further details on the financial performance of last fiscal year.

Thank you, Jurgen. Welcome from my side to our today's conference call. Let's take a look at the segment's performance after 12 months, noting that currently headwinds had a significant impact on the results. Net sales mix continued to be well balanced with around 52% generated in print and packaging equipment, 46% in digital solutions and life cycle, while the remaining part contributed a Heidelberg technology. For the time being a minor contribution, which develops in line with internal expectations in the future, the growth engine of Heidelberg.

Incoming orders in the Print & Packaging Equipment segment declined by 11%, amounting to EUR 1.13 billion, reflecting the absence of investment tailwinds and negative currency effects of around EUR 41 million. Net sales grew softly by 2%, reaching EUR 1.18 billion, driven primarily by solid demand in sheetfed in White Web despite currency headwinds of around EUR 39 million. As a result, adjusted EBITDA declined reaching EUR 93 million compared to EUR 107 million in the previous year. The adjusted EBITDA margin declined by 130 basis points to 7.9%, largely due to product mix utilization and currency effects for uses than any deterioration in underlying competitiveness.

After 12 months, the digital and life cycle segment recorded an order intake of EUR 1.05 billion, which is about 4% below the previous year's level, primarily driven by currency headwinds again. Currently loan accounts for roughly EUR 30 million masking and otherwise broadly stable and underlying demand picture. Net sales performed roughly stable year-on-year to EUR 1.05 billion, concentrated in service and consumables. Again, materially impacted by currency effects of around EUR 30 million. This was partially offset by solid performance in Heidelberg, which helped stabilize the top line. Adjusted EBITDA stable at 6.8%, reflecting deliberately reduced cost base and disciplined cost management.

In the Heidelberg Technology segment, order intake and net sales showed a slight improvement versus prior year. Driven by e-mobility, industry business remains stable, providing a steady baseline. In e-mobility, Heidelberg achieved a significant improvement in the cost position. However, given the current scale and ramp-up status is security and defense since improvement was offset. Overall, the adjusted EBITDA margin is still negative.

Let's move on to the regional deal. In EMEA, the absence of last year's [indiscernible] effect, combined with challenging economic condition was clearly felt, resulting in an 11% decline in order intake to EUR 1.1 billion. Net sales, however, reached EUR 1.17 billion, representing a 3% increase. With weaker performance in Lifecycle, partially offsetting stable equipment demand. Regionalized to highlight the performance contribution of Italy, which was backed by a governmental support program. Across Greater China and Asia Pacific, Order intake decreased about 6% to EUR 600 million, while in Greater China, order intake showed underlying improvement towards the second half, partially offset by significant currency headwinds of overall EUR 40 million.

Net sales were with EUR 583 million, 8% below prior year. On a currency adjusted basis, performance was largely stable. Sales order decline mainly reflects currency pressure and legal sheetfed demand in Asia Pacific. With EUR 535 million order intake in Americas was 2% below prior year, impacted by U.S. trade-related uncertainties and a significant negative currency effect of EUR 30 million despite an improving order trend since third quarter. Net [indiscernible] at both the prior year driven by strong demand for Boardmaster [indiscernible] more than offsetting adverse currency effect of EUR 32 million.

Now let's turn to our EBITDA bridge, which highlights the key drivers behind the year-on-year change in operating profitability. In the prior year, reported EBITDA amounted to EUR 137 million. In December 2024, we recognized a provision of EUR 29 million for future transformation measures, which was adjusted for in EBITDA. In March 2025, this provision was adjusted to a total of EUR 25 million. During the year, operating performance was impacted by the challenging external environment. The outlay of the conflict in the Middle East led to a sudden weakening of investment demand downside supply constraints, other delays, higher energy prices and tariff effects.

In addition, persistently negative currency impacts reduced EBITDA by around EUR 20 million. While product mix was less favorable compared with the prior year. Softer pricing combined with a EUR 20 million negative currency impact and stable capacity utilization weighed on profitability. At the same time, efficiency initiatives generated measurable productivity improvements, while disciplined cost management further reduce the operating cost base.

In addition, the absence of Kruger trade fair costs benefited the period, partly offset by expenses related to 2 years Print China. Overall, adjusted EBITDA came in at EUR 151 million for the fiscal year 2025, 2026.

Next page, we show the cash flow, starting with the decreased operating cash flow, which was at EUR 36 million compared to EUR 113 million in prior year. due to lower customer down payments and reduced EBITDA after 12 months. Tax and interest slightly improved year-on-year. Net working capital effect declined year-on-year by EUR 48 million, primarily due to lower down payments, which more than offset operational improvements from reduced inventories. Restructuring-related payouts increased to EUR 26 million, reflecting the implementation of the comp plan.

Further, year-on-year movements were driven by function effects and other operating changes. This included a mix of cash and noncash items and had an overall negative impact on operating cash flow. The decline was mainly due to working capital related effects, including personnel accruals, high differences between payables and receivables, higher commission payments and tax-related items.

Let's finish the cash flow section by looking at our free cash flow. The cash flow from the investments amounted to minus EUR 76 million after 12 months. CapEx was below prior year despite Polar Group acquisition of EUR 11 million as the prior year elevated by demo machine investments. Investments income of around EUR 22 million was lower in the prior year, which had benefited from strong sales demonstration machines around [indiscernible]. After 12 months, free cash flow was negative EUR 19 million compared to EUR 51 million positive in the previous year, mainly due to a slightly weaker operating result, while Inventory reductions did not fully compensate for lower customer down payments.

To conclude, let me briefly highlight how we further strengthened our balance sheet and financial position over the year, underpinned by a higher equity related a solid financial position and deal extension of our revolving credit facility, clearly demonstrating our financial ray and flexibility. Equity increased over the past 12 months, supported by strong net income growth of approximately EUR 15 million and a higher function discount rate. Accordingly, equity ratio improved by 210 basis points to 27.2% with total equity amounting to EUR 568 million. This positive development was partially offset by currency translation effects of EUR 13 million recorded directly in equity. Functional liabilities stood at EUR 605 million, reflecting the increase in the German function discount rate to 4.2%. The net financial position decreased to EUR 39 million, mainly as a result of negative free cash flow of EUR 19 million. Nevertheless, the continued positive net financial position underpins Heidelberg's financial discipline.

During the year, we further reinforced our financial flexibility by upsizing our syndicated credit facility to EUR 436 million and extending its maturity. As a result, liquidity remains with substantial headroom as the revolving credit facility was strong at only almost 15% of its EUR 436 million capacity at the end of March 2026.

I now want to hand back to Jurgen Otto to wrap up the achievement of fiscal year '25/26.

Yes. Thank you, Volker. Let me now wrap up our presentation by summarizing our key achievements for full year 2025/'26. Overall, we made strong progress on both our strategic initiatives and cost measures, which translated into improved structural cost indicators as well as a better result before tax and after taxes, laying a solid foundation for our future development. Among the key structural highlights, within our [indiscernible], we concluded more than 550 exit agreements to structurally adjust our personnel cost base, mainly in Germany. We implemented significant cost reduction and efficiency measures, including the consistent relocation of 104 in China and the launch of our low-cost country footprint in North Macedonia. We advanced key digitalization initiatives.

In addition, we made substantial progress in executing our strategic transformation. We further expanded our digital business. including the ramp-up of digital print through strategic partnerships with Canon and Rico. We signed a strategic partnership agreement with Masterwork, significantly expanding the scope and the depth of our collaboration beyond the previous sales cooperation. And we completed the integration of Polar further enhancing our market position and operational platform while striving for further M&A to even extend our position as a leading player in our industry.

We successfully transformed Amplify's business model from a hardware-focused player to a fully integrated solutions provider in charging technology. And very important, we established a further pillar in security and defense, successfully initiating our activities in high-growth and future-orientated markets. Taken together, these measures have started to improve our cost base and earnings profile, reinforcing the foundation for sustainable and profitable growth going forward.

With that, thank you very much for listening, and let me hand it back to the operator.

[Operator Instructions] And the first question comes from Stefan Augustin from Warburg Research.

Yes. I have a couple of ones. The first 1 is actually a little bit a question if you can elaborate more on where the sudden shortfalls in on the profitability side actually came from versus your budget. I mean I see if I look in the segmentation that Europe and Asian business has been quite weak and the sales has been quite weak in the fourth quarter, while the U.S. was okay, and you highlight the FX impact. So possibly a little bit reframing the question. Is it fair to simply assume that the pricing in the North American sales was not up to your expectations. .

Yes, Mr. Augustin, David Schmedding speaking. I will try to answer your question, especially talking about the shortfall in Q3 as a sudden one. Of course, we are faced with the outbreak of the conflict in Middle East, led to, of course, a sudden weaker in, let's say, situation of investments this came for us as a surprise in this speed and this, let's say, heaviness. And of course, we had some other explanations behind causing some order delays, of course, which were now reflected in the figures. And talking, of course, about the situation in Americas. Yes, as the order momentum increased, this is what Volker Herdin was talking about starting in Q3. Yes, it's improved, but nevertheless, the situation is still uncertain due to the tariff situation. And...

[Technical Difficulty]

Hello?

One moment, please, sir. I will bring them back.

Thank you.

Please wait one moment. Sir, you're back in the conference. Please go ahead.

Mr. Augustin, have you got the answer?

Most of it probably, maybe just the last couple of...

Yes, we have lost in the connection.

I was talking about the currency situation in Americas. I don't know if you got my answer here.

No.

[indiscernible] heavy FX impact headwinds in the U.S. economy causing also some delays in investment decisions plus the tariff situation. So in a lot of trouble to customers are delaying investments, of course. Nevertheless, we saw in improving order momentum starting in Q3. Customers ordered again. but it's still not on the level that we were expecting and the tariff situation is still an issue for us. Of course, especially in the service business, we increased prices significantly over the last quarter here to compensate for the shortfall caused by tariffs. This will compensate the loss over the next quarters as well. But overall, the situation is as it is, and it's reflected now in the numbers.

I want to add 1 thing, we had a mix effect. That means as you already mentioned, we had weaker sales in China. And in China, we have better profitability in our machines. So the mix effects hit us. Additionally, we had some cleanout effects on the year-end, certain warranty claims and other topics, which amounted to EUR 3 million to EUR 4 million, which also came together that all came together at the year-end, and that's why we had this weakness.

Okay. Thank you very much for the explanation. A couple of others. The first 1 is actually on the joint venture on that. Is it possibly to give us a little glimpse of how you plan to progress here. The next 1 is then an update on Manroland and your entry into the very large format. So what will you make out of the situation with Manroland. I mean there is possibly a service business to be fetched up.

And the last 1 is a small housekeeping question on the deviation between the free cash flow and the change in the net cash position. Is that all IFRS 16 lease? Or is there a couple of other elements in there, or let's say, is there 1 namely big element in there? Or is it just a couple of smaller ones? That will be the questions.

Yes, Stefan, thank you. I think we will give you a much deeper outlook at the 10th of June regarding all our security and defense activities, and there will be some news also presented to public at this 10th -- or latest the 10th of June, and we will give also a deeper outlook for our under activities at that state.

Secondly, Manroland, yes. David?

I can answer your question about Manroland as [indiscernible] Heidelberg plan remains to continue the VLS business. but economic rational and shareholder value creation are key. And accordingly, we follow the current situation at Manroland, and might adapt our internal defined strategy if needed. Looking for your understanding that we don't comment, of course, on any market speculation but be sure that we will communicate immediately as soon as we have some updates about the VLF strategy.

Statement on the net cash and the free cash flow. .

Yes. David will answer your question. We have the experts here.

Yes, your assumption was basically correct. So it's mainly due to IFRS 16 lease effects and a minor FX effects due to currency translation of around EUR 2 million.

[Operator Instructions] And we have 1 more question from Sven Sauer from Kepler Cheuvreux.

Just 1 from my side and a follow-up on the impact of the Iran war in Q4, I'm a bit confused because on the 1 side, you say that there has been a weakening of investment demand. due to the war, which was pretty much 1 month in your last quarter. But on the other side, the Q4 order intake was even up year-over-year. So does that imply that you would have expected a higher order intake in Q4? Or were there some cancellations? Yes, it would be great if you could provide some more color on this.

So at the end, it depends, of course, on the regional development, which were really different globally. So talking about the regional development, we saw a strong the momentum coming from China in the last month of the last fiscal year, so helping us in this fiscal year, of course. So with this these orders on the same way we saw shortfalls in the order intake, which were expected on a higher level in Europe, and this is exactly reflected in the total number. So the effects coming from the different global development.

So China was performing on an okay level in the last quarter of the last fiscal year and compensated shortfalls in other regions, especially in EMEA, where our rain on Middle East businesses included.

[Operator Instructions] At the moment, there are no further questions.

Yes. Then thank you, everybody, and see you back on June 10 with some exciting news. See you then. Bye-bye.

Good afternoon, ladies and gentlemen, and welcome to the Conference Call for the Publication of the Q3 Results 2025-'26 of Heidelberger Druckmaschinen AG. [Operator Instructions]

Let me now turn the floor over to your host, Mr. Otto, CEO.

Yes. Good afternoon, ladies and gentlemen. Let me start with a brief snapshot of our performance after 9 months. Overall, Heidelberg delivered a solid and resilient performance despite a challenging external environment, marked by weak macro momentum and continued FX headwinds. Order intake reached EUR 1.6 billion and was below the prior year level as expected. Prior year had benefited from a strong market environment. Importantly, book-to-bill remains above 1.0, supporting revenue visibility going forward.

We are seeing a slightly positive trend. We had a very good order intake from the U.S. especially in October and November. Customers continue to rely on our products and services and have not opted for other solutions in the meantime, but have waited with their investment decisions and are now ordering. This is a positive trend. Hence, we are cautiously optimistic about the coming months.

On the top line, net sales increased to EUR 1.6 billion, reflecting resilient demand and solid execution, even though currency effects continue to wait on reported growth. On a constant currency basis, the underlying development remains clearly positive. At the same time, we made further progress on profitability. The adjusted EBITDA margin improved significantly to 7.1%, up to 140 basis points year-over-year, reflecting higher production efficiency and more favorable cost structure and the visible impact of our Zukunftsplan measures. The number of employees declined as planned and structural personnel and functional cost measures are increasingly translating into earnings leverage.

In addition, net income increased significantly by EUR 59 million to a positive EUR 17 million. Free cash flow remains negative after 9 months, which is typical for the period and mainly driven by working capital timing effects as well as nonrecurring cash outs related to M&A, the Polar and the Zukunftsplan. However, it improved clearly year-over-year, supported by higher net income and disciplined cash management.

In summary, despite the fact FX headwinds and macro uncertainty still has its negative impact, overall performance remains robust and in line with expectation. Our strategic focus on efficiency, cost discipline and operational execution is paying off.

Let me continue by outlining our strategic progress. Heidelberg is on a promising path and our strategic realignment is delivering in a challenging market environment. Our core business continues to provide the strong foundation on which the transformation is built. Our unique USP is the intelligent combination of equipment, software and services on a global scale. This integrated approach not only strengthens our market position, it also opens up new avenues for growth. With targeted portfolio expansions such as the new Jetfire 75 launched in January, we are complementing our system integrated solutions offering and are creating structural growth opportunities.

Building on this momentum, let me now turn to our technology growth agenda. We are systematically positioning ourselves in new business fields such as defense, security, energy and industrial system solutions, all markets by megatrends and driving structural demand. Under the name of HD Advanced Technologies, we will establish the framework to act as a trusted partner in this environment. I'll come back to this later on.

Before we get into our product highlights, let's take a quick look at a very important financial topic. At the beginning -- next slide. At the beginning of the year, we extended our syndicated credit line ahead of schedule, creating a stable financing basis for our company, a powerful sign of trust from our banking partners. We achieved this with a slightly modified banking consortium, adding new partners and increased the volume by EUR 66 million to EUR 436 million. With an extended maturity to 2030, we now have considerably more leeway for our planned business expansion.

In addition to financing our operating business, the new syndicated loan provides a solid foundation for our company's further strategic development. It is, of course, intended to support our growth, especially outside the print and packaging sectors.

Let's take a look at our order situation. For this, I would like to hand over to Dr. David Schmedding.

Good afternoon, ladies and gentlemen, and also welcome from my side. Book-to-bill remains above 1.0, confirming a solid and resilient demand base despite the challenging macro environment and ongoing FX headwinds. Revenue visibility, therefore, remains sound going forward. Order intake of EUR 1.6 billion over the first 9 months underlines the continued robustness of demand even against the strong prior year comparison. This strength is broadly based.

Heidelberg's global diversification continues to be a key differentiator with balanced contributions from multiple regions, helping to offset regional volatility. Importantly, our global sales and service network combined with a competitive cost base and local production in China provides a clear structural advantage. While macro uncertainty persists, particularly around U.S. tariff discussions, our diversified footprint and disciplined cost structure continue to ensure resilience and stability.

We are also seeing early positive signs. Order intake from the U.S. was strong in October and November as customers sense increasing stability and unchanged tariff conditions. Many had delayed decisions but are now placing orders again. This is encouraging. And overall, I would like to describe the situation as cautiously optimistic.

Let's now turn the attention to our solution highlights and how we are strengthening our hybrid portfolio. I would like to reiterate, Heidelberg offers a true end-to-end hybrid ecosystem. With Prinect, our customers switch seamlessly between digital and offset production. The Jetfire 50 continues to perform strongly with about 30 machines sold and a solid funnel.

Building on this, we launched the Jetfire 75 in January. It is the digital core of our hybrid strategy and targets the structurally growing demand for short runs, personalization and hybrid jobs. The entire Jetfire family is fully integrated into the Heidelberg ecosystem. This strengthens our high-margin system business, drives recurring revenues and leverages our installed base. With Jetfire, we combine offset strengths with innovative digital technology, delivering maximum flexibility, top quality and true hybrid productivity for our customers.

In November, we hosted the Saphira Experience Day at our Print Media Center here in Wiesloch. This event gave us the opportunity to demonstrate the breadth and performance of our Saphira consumable portfolio in live production environment and to underline Heidelberg's positioning as a full-service provider. Saphira covers the entire print production process and is designed as a true plug-and-play consumable platform.

The key focus of the Experience Day was the benefit of tested, harmonized consumables and highly optimized workflow. Because Saphira products are fully integrated into our machine and service ecosystem, customers benefit from higher efficiency, greater process stability and lower total cost of ownership. This end-to-end system integration not only creates clear operational value for customers, but also strengthens long-term customer loyalty and recuring revenue streams for Heidelberg. Overall, the Saphira Experience Day sent a clear signal for the future of print, driven by innovation, deep expertise and close collaboration with our customers.

And with that, I would like to hand back to Jurgen Otto, who will give us a more detailed look into the technology segment.

Thank you, David. Can we go to the next slide. At the moment, we are discussing potential partnerships and collaboration with players in the defense, security and energy spectrum. Again, we are building on decades of industrial and systems expertise and are targeting markets in the areas of megatrends, as I said, security, defense, energy and charging infrastructure coming also from the amplified footprint. To underpin this development, we will bundle all corresponding activities under the name of HD Advanced Technologies. We assigned dedicated resources for strategic steering of the buildup of our second engine to work towards our goal of becoming a reliable technology and system partner in these new industries. We will, of course, keep you informed about further progress.

Volker, please move on with our financial figures.

Thank you, Jurgen. Hello, everyone, from my side, and thank you for joining us today. Now let's concentrate on third quarter financials on the next slide. On the order side, we continue to navigate in a challenging market with significant currency headwinds by demonstrating solid resilience. In quarter 3, order intake declined by 6% year-over-year, reflecting the overall market situation and adverse currency effects. Please bear in mind that third quarter last year has been backed by drupa-related orders. With additional orders in the third quarter based on the Labelexpo, which took place in September delivered double-digit million euro orders in total, reinforcing the strong strategic and growth potential of label printing.

Net sales grew by solid 4% despite currency pressure, demonstrating the strength and resilience of our revenue generation. The currency headwind must be taken into account, but overall seasonality trend in sales of the recent years is still intact. Accordingly, we are confident that the sequential growth in the fourth quarter will contribute to deliver on our business year '26 guidance.

Due to gross margin effects, which could be partly offset by efficiency gains in functional areas, adjusted EBITDA was down by 100 basis points year-over-year. Last year's third quarter included roughly EUR 29 million of provisions for structural personnel cost measures adjusted as a special item. So far, this business year, no adjustments for special items were required. Net income increased significantly from minus EUR 7 million to EUR 17 million in this quarter. Free cash flow declined from EUR 4 million to minus EUR 17 million as an effect of lower customer down payments.

Having a look on the segment's performance after 9 months, noting that, as mentioned earlier, currency headwinds had a significant impact on the results. Incoming orders in the Print & Packaging Equipment segment declined by 18%, amounting to EUR 794 million. Net sales grew by approximately 14%, reaching EUR 804 million driven primarily by robust demand for print and packaging solutions. As a result, adjusted EBITDA improved, reaching EUR 77 million compared to EUR 58 million in the previous year. Adjusted EBITDA margin rose to 9.6%, an increase of 140 basis points due to higher capacity utilization combined with lower costs, resulting in a significant EBITDA improvement.

After 9 months, the Digital & Lifecycle segment recorded an order intake of EUR 791 million, which is about 3% below the previous year's level, reflecting a lower cyclical sensitivity. Net sales held steady at EUR 755 million with solid narrow web growth boosted as mentioned by Labelexpo offsetting software service and consumables. The adjusted EBITDA increased from 5.4% to 6.1% over the first 3 quarters versus the prior year period. However, third quarter was below the prior year quarter, primarily due to temporary product mix effect.

In the Technology segment, order intake and net sales after 9 months were up year-over-year, rising by around 4%, while adjusted EBITDA improved by roughly 10 percentage points.

So let's have a look on the regional view. In EMEA, the absence of last year's drupa effect combined with challenging economic conditions was clearly felt, resulting in an 11% decline in order intake to EUR 823 million. Net sales, however, reached EUR 836 million, representing a significant 13% increase driven by new machine deliveries by service, and parts and consumables remain modest. Regional-wise, to highlight the performance contribution of Italy, which was backed by a governmental subsidy program.

In Asia Pacific, order intake remained challenging due to cautious investments behavior amid currency weakness in U.S. trade conflicts. In total, EUR 415 million, which is a decline of 14% on reported base, respectively, FX adjusted 9%. Worth noting that our core market, China declined by minus 5% year-over-year and outperformed other countries of the region in comparison. Asia Pacific net sales came in at EUR 410 million, 3% below last year with solid deliveries to Japan and Indonesia. On a constant currency basis, net sales would have grown by roughly 3%.

Americas, so order intake down about 5% year-over-year over the first 9 months. But the third quarter rebounded strongly with approximately a 17% increase versus the prior year quarter. Supported by this strong third quarter, net sales ended above last year. The region continued to face significant currency headwinds and the outlook for tariffs remain uncertain.

Our EBITDA bridge on the next page illustrates the key drivers behind the change in operating profitability after 9 months compared with last year when reported EBITDA stood at EUR 57 million. In December 2024, we built a provision of EUR 29 million for future transformation measures, which was excluded from adjusted EBITDA. Higher sales volumes together with improved capacity utilization in both production and service supported profitability. This was partly offset by margin dilution from an unfavorable product mix. At the same time, efficiency measures delivered tangible productivity gains, while disciplined cost control initiatives led to a further improvement in operating costs.

Personnel expenses declined as head count reduction savings more than compensated for one-off wage payments, and prior year short-time work effects. In addition, the absence of drupa trade fair costs benefited the period, partly offset by expenses related to this year's Print China, and the one-off personnel provision release that had supported the prior year only. Overall, adjusted EBITDA doubled year-over-year to EUR 114 million after 9 months with no items adjusted in EBITDA.

Let's continue with our cash flow, starting with an improved operating cash flow, which was at EUR 35 million -- at minus EUR 35 million compared to minus EUR 66 million in prior year. Due to a strong EBITDA achievement with EUR 114 million after 9 months. Tax and interest were slightly above prior year. Net working capital impact declined year-over-year by EUR 2 million. Restructuring-related payouts increased to EUR 15 million, reflecting the implementation of the so-called Zukunftsplan. Pension effects and other operating changes had a positive impact on operating cash flow, driven primarily by improved tax positions and VAT balances, contributing EUR 5 million year-over-year.

Let's finish the cash flow section by looking at our free cash flow. The cash flow from investments amounted to minus EUR 58 million after 9 months. Higher investments were driven by the acquisition of the Polar Mohr business in the low double-digit million range. Divestment income of around EUR 11 million was lower than in the prior year, which had benefited from strong sales of demonstration machines after the drupa. So after 9 months, free cash flow was negative EUR 81 million compared to negative EUR 97 million in the previous year, clearly a result of an improved operating cash flow.

Now let's conclude the section with a view of some balance sheet figures, driven by a positive net result of EUR 17 million and an increase of the pension discount rate, equity grew within the first 9 months. Through the end of 2025, the equity ratio increased by 110 basis points to 26.2%, and reached a level of EUR 563 million in absolute terms. These effects were partly offset by EUR 19 million currency translation losses recorded directly in equity. Overall, the equity ratio stood so far at 26.2%.

Our pension provisions totaled EUR 626 million, reflecting the increase in the German pension discount rate from 3.8% to 4.1%. The net financial position declined to negative EUR 18 million, driven by a negative free cash flow of minus EUR 81 million, a noncash increase of EUR 24 million in lease liabilities and adverse currency effects totaling minus EUR 5 million on cash balances.

As Jurgen mentioned at the beginning, we strengthened our financial foundation by increasing our syndicated credit line to EUR 436 million and extending its maturity. This provides us with strong liquidity and ample headroom with our revolving credit facility used at only 25% of its EUR 370 million capacity at the end of December 2025.

To summarize the financials of the first 9 months. I'd like to highlight some key messages. Despite a challenging market environment with significant currency headwinds, Heidelberg delivered a strong 6% year-over-year net sales growth. Ensuring strong profitability is central to everything we do. Our adjusted EBITDA margin, which increased by 140 basis points year-over-year reflects meaningful progress. We are executing more efficiently, managing our cost base with discipline and steadily improving the underlying quality of our earnings.

Thirdly, as mentioned earlier, our Zukunftsplan initiatives and ongoing efficiency programs are materializing and support profitability. We are seeing real tangible effects. The measures we put in place are improving our cost position and strengthening the foundation for sustainable long-term growth. This gives Heidelberg greater resilience in a volatile market environment while still allowing us to invest in our new program innovation and deliver added value for our customers.

And with that, let me hand it back to Jurgen.

Thank you, Volker. And this brings me to our outlook for full year 2025-'26 and our full year guidance. Based on the expectations and assumptions outlined in the 2024-2025 annual report, we continue to expect net sales of around EUR 2.35 billion for the 2025-2026 financial year compared with a EUR 2.28 billion last year. Given the substantial currency impacts we are facing and the still weak macroeconomic and uncertain trade policy environment, we anticipate that the adjusted EBITDA margin will likely come in toward the lower end of the forecast improvement of up to 8% versus 7.1% in the prior year. So overall, we are reaffirming our guidance and remain focused on disciplined execution and improved profitability.

Let me wrap up with the key messages for today. First, we are staying firmly focused on our core business. This is the backbone of Heidelberg, and it continues to strengthen our role as a system integrator in the global packaging market.

Second, our Zukunftsplan is fully on track. The efficiency and cost measures are implementing, especially on the personnel side, are beginning to show real traction and materially supporting our profitability.

And third, we are deliberately expanding into a new business pillar. We are making targeted investments and exploring selected opportunities in the defense sector, where we see attractive long-term potential. Overall, I want to highlight that we are in progress to bundle our security and dual-use activities under the name, HD Advanced Technologies, as we continue our way towards becoming a reliable partner in this area.

With that, thank you for your attention. I'll hand back to the operator.

[Operator Instructions] There are no questions at the moment. [Operator Instructions] I think there are no questions. [Operator Instructions] So there are no questions.

So if there are no questions, thank you for your attention. We will close the call. Stay safe. See you soon. Bye-bye.

Good afternoon, ladies and gentlemen, and welcome to the Heidelberger Druckmaschinen AG conference call for the publication of the second quarter of the fiscal year 2025-'26.

[Operator Instructions] Let me now turn the floor over to Jurgen Otto, the CEO of the company.

Yes. Good afternoon, ladies and gentlemen, and welcome to our half year performance report. In a highly dynamic business environment, our half year results demonstrate a solid financial performance, in line with expectations. While we see FX effects and tariffs with an impact year-to-date, we remain focused and disciplined with more than encouraging results in the books.

Amid U.S. tariffs, overall economic uncertainty and adverse FX effects -- underlying order intake for the first half year, compared to an outstanding prior drupa year, nonetheless, amounted to EUR 1.1 billion. In line with the general mechanical engineering development in Germany, we have to acknowledge that order intake was impacted by the overall global economic conditions, in particular, hesitation in the U.S. However, our one-of-a-kind global setup has enabled us to compensate to a high degree, so we were able to show also a strong development in certain countries, such as Italy.

Looking at the broader financials, it's clear that our strategic measures are taking effect. Not only has net sales improved by 8% year-over-year -- and it's important to note that this comes despite a significant FX headwind of EUR 23 million -- but the underlying business performance is also trending positively. Net sales growth was driven by strong demand across our packaging systems integration offering, especially in our digital offering for the label industry. Further, personnel measures are starting to show impact, with headcount reductions implemented so far. In addition to headcount reductions, further cost saving measures on the functional cost side are clearly reflected in an almost doubled EBITDA margin from 3.4% to 6.4%, with no special items in the first half. Also, still negative free cash flow improved compared to the previous year, primarily driven by operating performance, but was also burdened by M&A activities and cash outs in relation to our Zukunftsplan. Overall, I'm pleased to report that we delivered an encouraging half year.

Let's take a look at our order situation. Next slide. Yes. Our book-to-bill ratio improved from 1.08 to 1.13 compared to the B2 drupa year; and remains above 1.00, also in challenging environment, as we see today. Main reason for this is that our unique global setup in 170 countries and the best-in-class production with a local-for-local content is paying off.

We are seeing solid growth momentum in markets, such as Italy and Mexico, while our production in China is not only providing a strong cost advantage compared to our direct competition, but also contribute significantly to our orders. 34% of our equipment order intake for the first half year will be produced and manufactured in China, which have superior profitability levels inherent compared to equipment manufactured in Germany.

Now David Schmedding will give us some insight on our highlights of the last months. Please, David.

Thank you, Jurgen, and welcome, everyone. I'm very pleased to present to you a few highlights from our first half year.

Ten years ago, Heidelberger Druckmaschinen and MK Masterwork, China's leading manufacturer of finishing systems for the packaging industry, entered into a strategic sales partnership. Under this agreement, Heidelberg distributes MK Masterwork's high-performance post-press portfolio. Since then, Heidelberg has installed around 1,500 systems produced by MK Masterwork, for customers all over the world. In October, both companies celebrated the anniversary of their successful partnership with around 100 international customers, at MK Masterwork's headquarters in Tianjin. At the same time, we turned towards the future and signed an agreement to extend and expand our cooperation in the field of integrated and highly automated packaging solutions, which, for example, also includes the integration of MK Masterwork's robotic systems.

As of today, we can conclude that our cooperation with MK Masterwork is a proven success story. Furthermore, we celebrate 20 years of Heidelberg in Shanghai. From a small side, with 60 employees assembling entry folding machines in 2005, our Shanghai plant has grown into one of Heidelberg's largest global hub, producing advanced mid- and large-format presses, including the Speedmaster SX 102 and Speedmaster CX 104. From a strategic and long-term point of view, Heidelberg's production setup, including our site in China, is one of the key competitive advantages vis-a-vis our direct competition.

In October, we announced another success story in the field of digital printing. Shengda Printing Technology, China's largest web-to-print company stood out as the first Chinese customer to employ an industrial Jetfire 50 inkjet system. More than 95% of all orders come via the Internet, with a daily capacity of 80,000 orders. After its initial very positive experience with the Jetfire 50 system from Heidelberg, the company has now invested in a total of 10 more systems of this type. And in addition, Shengda has ordered 10 Gallus One and Gallus Five label system. This landmark deal with Shengda Printing Technology, emphasizes the strength of our industrial digital printing solutions.

Let's stay with the label printing for a moment. In September, we successfully presented ourselves together with Gallus at Labelexpo 2025, with strong demand across the entire system to compose portfolio. The positive market feedback underscores our leadership role in innovation and digital transformation. Three important product launches are driving next generation growth in label printing. The Gallus Five sets new standards in hybrid productivity with a speed of up to 100 meter per minute. The Gallus Alpha is an affordable entry-level digital solution for growing customer demand, and the Gallus Print Academy provides on-site training for smart connected printing.

It is encouraging to see that sales momentum is exceeding expectations for both new and existing digital label systems. But we are not only making progress in our equipment solution approach, but also in further areas, such as service, as part of our system integrator approach.

As one of the first projects, we have partnered up with Schubert Packaging, an international specialist in packaging solutions based in Crailsheim. Schubert produces packaging systems for the filling industry, primarily in the foods, cosmetics, and pharmaceutical sector. We have taken over operational service, including installation for packaging solution installation at the customer site in Brazil. Under the partnership, Heidelberg is responsible for production support and targeted measures to optimize the performance of machines and systems in Brazil, which includes functional tests, technical advice, and inspections and maintenance work. The use of our professional and global service network by partners such as the Schubert Group is a testament of the quality that our service team is offering. As of now, we will not only offer these services to customers in our core industry, but also open this up to further industries.

I will pass now on to Jurgen, to share an update on our technology segment.

Yes. Thanks, David. Let's now take a look at our affiliate, Amperfied, which also has some exciting news to report shortly before the publication of this report.

As a general remark, I would like to reiterate that we are continuously transforming our business model in this area. Basis for this change is our comprehensive expertise, not only in manufacturing high-quality products, but also in software and automation. Both of that helps us transforming our business, leveraging our know-how in software automation and service.

Now to our latest achievement at Amperfied. After taking over the operational management of more than 1,700 SAP charging points, Amperfied was able to further expand its position as a provider of modular, scalable, and hardware-independent charging infrastructure solutions for corporate fleets. With their full-service approach for fleet customers, our colleagues at Amperfied prevailed in a highly competitive tender process and won Siemens Energy as a new major customer. Implementation will start immediately, while the partnership is designed to be long term and based on further expansion of the charging points by Amperfied, which will ensure recurring revenues in a highly scalable business model.

More importantly, e-mobility is not the only business field we are progressing. Let me conclude our highlights section with an update on our defense activities, especially on our Vincorion partnership. As we have already said, project of this size and in the area of defense takes some time, but I can assure you that our activities are encouraging and especially, the collaboration with Vincorion is proceeding according to plan. Joint research and development project activities are underway, and we have already seen an initial financial contribution for our group. In the next fiscal year, we see potential for a visible financial contribution.

I think it is important for you to hear that the defense industry acknowledges the competencies and capabilities, which we have here at Heidelberg. As a consequence, we are still in discussions with defense companies and third parties in the field of heavy machinery assembly, energy management, software, robotics and automation. And we remain focused on developing this business field of our group.

With that, let's move on to the central topic of the past year, the implementation of our Zukunftsplan. We have put together a comprehensive package of measures aimed at sustainably reducing costs at our sites by more than EUR 80 million over the next 3 years. The impact of these measures will become increasingly visible in the coming fiscal years. While a further automatic increase in personnel cost is suspended under the existing agreement, we can announce that we have our personnel initiatives contractually secured, giving us high visibility on the projected personnel cost savings over the next years. This enables us to continuously increase annual savings, which directly contributes to our profitability. In other words, we're saving more money every year.

The Zukunftsplan is an important step for Heidelberg, laying the foundation for sustainable growth across the group. By taking this step together, we are not only reducing cost at our largest sites in Germany, but also freeing up capital for key investments that will help us to achieve our growth targets. And of course, the question is, how can we become more profitable. Here, we are implementing a range of measures. We are focusing on growth in more profitable business areas such as automation, technology, service, and defense. However, please note that the full effect of such second engine is not yet included here. Some counts for potential M&A activities, which we observe at the moment. At the same time, we are continuing to reduce costs. As I mentioned before, our Zukunftsplan is already well underway.

I will now hand it over to Volker, for a detailed look at our half year results in detail.

Thank you, Jurgen. Hello, everyone, from my side, and thank you for joining us today. On the next page, let's concentrate on the second quarter financials.

On the order slide, we continue to operate in a challenging market environment, while demonstrating resilience. In the second quarter, order intake declined by 4% year-over-year, reflecting the strong prior year performance, driven by drupa-related machine orders and adverse currency effects. However, the Labelexpo trade fair in September generated new orders in the double-digit million-euro range, underscoring the strategic importance and growth potential of label printing, as you mentioned before.

Net sales were also impacted by currency effects, but still showed a slight year-over-year improvement of 1%. On a currency-adjusted basis, growth would have been close to 4%. The implementation of personnel and efficiency measures under the so-called Zukunftsplan delivered tangible benefits, driving a year-over-year increase of 40 basis points to an EBITDA margin of 8.2%. The solid underlying business performance confirms the effectiveness of our strategy and positions us for continued improvement in the coming quarters, with the further impact of personnel reduction savings expected from Q3 onward. Building on this, free cash flow improved year-over-year in the second quarter from EUR 2 million to EUR 4 million, driven by operating performance, although partially offset by a low double-digit investment related to the Polar acquisition.

On the HEIDELBERG segment, let's look at this performance after 6 months. As noted earlier, currency headwinds had a significant impact on the first half results. Incoming orders in the Print & Packaging Equipment segment declined by 20%, amounting to EUR 566 million, reflecting the strong prior year performance driven by drupa-related machine orders. Net sales grew by approximately 17%, reaching EUR 463 million, driven primarily by robust demand for Boardmaster and Sheetfed machines. As a result, adjusted EBITDA improved, reaching EUR 41 million compared to EUR 22 million in the previous year. The adjusted EBITDA margin rose to 8.8%, an increase of 330 basis points due to higher sales and enhanced operational efficiency. And cost reduction efforts have lifted EBITDA across all segments as the Zukunftsplan initiatives begin to deliver the results.

In the first half of the year, the Digital & Lifecycle segment recorded an order intake of EUR 516 million, which is about 4% below the previous year level. In the second quarter, however, order intake improved slightly to EUR 272 million, marking an increase of almost 3% compared to prior year. Net sales held with EUR 493 million, broadly stable as the decline in service and consumables, including a EUR 10 million currency impact was fully offset by robust narrow web growth, boosted by Labelexpo in September this year. The segment's adjusted EBITDA showed a significant improvement, reaching EUR 30 million for the half year and EUR 18 million in the second quarter.

Within Heidelberg Technology, Amperfied is constantly transforming its business, as we just shared, to a full-service systems integrator with recurring revenues. The segment reported orders and sales of almost EUR 29 million, showing no significant year-over-year change, while the adjusted EBITDA margin improved by 530 basis points.

Let's move to the regions. In EMEA, the absence of last year's super effect, combined with challenging economic conditions, was clearly felt, resulting in an 11% decline in order intake to EUR 563 million. Net sales, however, reached EUR 523 million, representing a significant 15% increase, driven by early new machine deliveries, particularly in Italy, supported by a governmental subsidy program, while service and parts and consumables remained weak.

In Asia Pacific, order intake remained subdued at EUR 296 million due to cautious investments behavior with currency weakness and U.S. trade conflict. The decline of 14% would be around 11%, again, when we adjust for currency effects.

Chinese market conditions were particularly challenging. While China Print had a positive impact early in this year, last year also benefited from the drupa effect. Currency headwinds added EUR 8 million of negative impact versus prior year. The net sales in Asia Pacific reached EUR 296 million, significantly above last year's low level, supported by a strong opening backlog, especially from Japan and Thailand. Adjusted for currency effects, the year-over-year improvement would have reached 11%. China posted a strong first quarter and softened, ending roughly flat year-over-year on a currency-adjusted basis.

Last, but not least, in the Americas, order intake was impacted by U.S. tariff issues, limiting larger volumes and a negative currency effect of EUR 14 million so far. This means that reported 14% decline equivalent to EUR 251 million, would have been only 9% on a currency-adjusted basis. The deviation in net sales compared to the prior year, amounting to EUR 202 million and reflecting a 7% decline, was primarily driven also by currency.

Let's come to the EBITDA bridge, which shows the changes in our operating profitability. We just heard it from Jurgen, this year was very profitable compared to last year, which was only EUR 31 million. In addition to the higher sales volumes and the associated higher capacity utilization in production and service, the efficiency measures introduced had a positive effect on productivity. Cost control initiatives led to improvements in operating cost. The increase in personnel cost, driven by the discontinuation of short-time work in the prior year and a one-off payment, was largely offset by our FTE reductions. Material expenses were also significantly reduced. In addition, there were no expenses for the drupa trade fair, and the previous year expenses from drupa amounted to around EUR 10 million. In total, adjusted EBITDA doubled year-over-year and was at EUR 63 million after 6 months, with no items adjusted in EBITDA in the first half of the year. The increasing comes especially out of material, where we improved our quota about 1%, and our personnel quota of our sales has improved by approximately 1.7% this year.

Let's come to the operating cash flow. We started with a clearly improved operating cash flow, which was at minus EUR 30 million compared to minus EUR 87 million in prior year, mainly due to a strong EBITDA achievement with EUR 63 million. Tax and interest were in line with prior year. Net working capital continued to improve year-over-year by EUR 6 million, supported by enhanced trade receivables management. Restructuring-related payouts increased to EUR 10 million, reflecting the implementation of the first phase of the Zukunftsplan. Function and other operating changes contributed positively to operating cash flow development, primarily driven by adjustments in tax-related positions and VAT balances, showing an improvement of EUR 18 million year-over-year.

Let's finish the cash flow section by looking at our free cash flow. The cash flow from investment amounted to minus EUR 39 million after 6 months. Higher investments were driven essentially by the acquisition of the Polar Group business, which amounted for a low double-digit million range. Investments income decreased versus the prior year, where we had the machine selling of the drupa demonstration machine. After 6 months, free cash flow was minus EUR 64 million compared to a negative EUR 102 million in the previous year, as a result of an improved operating cash flow.

Let's conclude the section with a few of our -- of some balance sheet figures. First, our equity decreased to EUR 533 million as of September 30, 2025, despite a balanced after tax result and positive effect from the change in the pension discount rate from 3.8% to 3.9%. This decline was primarily driven by negative currency effects of approximately negative EUR 20 million, resulting an equity ratio of 24.4%. Our pension provisions totaled EUR 641 million, reflecting again the increase in the German pension discount rate to 3.9%.

Moving to the right side of the chart. The net financial position remains positive at EUR 10 million, meaning cash and cash equivalents still exceed financial liability. The decrease is mainly due to a negative free cash flow of minus EUR 64 million, a non-cash rise in lease liabilities and negative currency effects on cash holdings. Despite this, we maintained strong liquidity with ample headroom in our revolving credit facility, which was utilized at only 16% of its EUR 370 million capacity as of the first quarter reporting period.

To summarize the financials, I would like to highlight some key messages. Despite a challenging market environment, Heidelberg delivered a strong performance in the first half of the fiscal year. The net sales increased by 8% year-over-year, reflecting the resilience of our business and the trust of our customers even in uncertain times. Profitability remains at the core of our strategy. I'm pleased to report that adjusted EBITDA has doubled compared to the previous year, a clear indication that our focus on operational excellence and disciplined cost management is paying off. Furthermore, our Zukunftsplan initiatives are beginning to show tangible results. The cost and efficiency measures we implemented are not only improving our profitability, but also strengthening our foundation for a sustainable growth. These efforts position Heidelberg to navigate market volatility by continuing to invest in innovation and customer value.

With that, thank you, and let me hand it over to Jurgen again.

Yes. Thank you, Volker. And this brings me to our outlook for full year 2025-'26. Heidelberg is firmly on track to meet the financial guidance set for the current fiscal year. This confidence is grounded in the strong progress we have demonstrated over the first 6 months and supported by our order backlog, which positions us well to drive sales in both the third and fourth quarters.

For the second half of the year, we expect sales to remain broadly in line with last year's level. However, it is important to note that we have already achieved around 8% higher sales in the first half compared to the previous year, which has had a positive impact on both profitability and free cash flow. The adjusted EBITDA margin nearly doubled, reaching 6.4% and these improvements are not coincidental. They reflect the disciplined execution of our strategy and the benefits of ongoing efficiency and cost control measures, which will continue to support our performance in the months ahead.

Overall, we reaffirm our guidance, net sales of EUR 2.350 billion, adjusted EBITDA margin of up to 8%, and this outlook underscores our commitment to delivering sustainable growth and profitability even in a challenging market environment. I would like to highlight that this performance is based on the tirelessly work of our Heidelberg colleagues. And it is important to note that we have also strengthened our team with new and top management additions in important areas such as packaging, technology, and defense, as well as Volker in finance.

As we conclude, I'd like to highlight some key messages. The first half of full year 2025-'26 delivered the improvements we committed to, net sales and adjusted EBITDA margin, both showed significant progress. Looking ahead, our order backlog and continued cost and efficiency measures provide a solid foundation for achieving the full year guidance. We remain confident in delivering net sales of approximately EUR 2.350 billion and an adjusted EBITDA margin of up to 8%.

Beyond financial performance, Heidelberg continues to maintain its strong global market position, while actively expanding into new business fields as our examples in e-mobility and defense are showing.

Thank you for your attention. I would like to hand it back to the operator.

[Operator Instructions] At the moment, we do not have any questions.

[Operator Instructions] There are no questions at the moment.

Perfect. All set? Thank you very much, and see you soon. Thank you. Bye-bye.